Cash Flow Management for Electricians

You did $200,000 in revenue last year but you're still stressed about making payroll. That's a cash flow problem, not a revenue problem.

The Cash Flow Gap The typical electrician cash flow cycle: 1. Buy materials (cash out immediately) 2. Do the work (labor cost this week) 3. Send invoice (1-3 days after completion) 4. Wait for payment (14-45 days)

That's a 3-6 week gap between spending and getting paid.

Fix #1: Require Deposits - 50% deposit for jobs over $500 - 100% upfront for materials - This eliminates the material cash gap

Fix #2: Invoice Immediately Don't wait. Invoice the day the job is done. - CrewDash lets you invoice from the job site - Include an online payment link - Average payment time drops from 21 days to 3 days

Fix #3: Payment Terms - Due on receipt (not net 30) - Accept credit cards and ACH - Offer 2% discount for payment within 48 hours - Automatic payment reminders at 7, 14, 21 days

Fix #4: Separate Accounts - Operating account: daily expenses - Tax account: set aside 25-30% of every payment - Emergency fund: target 3 months of fixed costs

Fix #5: Time Your Expenses - Buy materials as close to job start as possible - Use business credit card for 30-day float - Negotiate net-30 with suppliers once you have volume

Cash Flow Dashboard Track these numbers weekly: - Cash in bank - Outstanding invoices (< 30 days) - Outstanding invoices (> 30 days) - Upcoming material purchases - Payroll due this week

The 3-Month Buffer Target: 3 months of fixed costs in savings. - Typical fixed costs: $5,000-15,000/month - Target buffer: $15,000-45,000 - Build it $500-1,000 per month - Don't touch it unless emergency

CrewDash tracks your invoices, payments, and outstanding balances in real-time so you always know your cash position.