If you’re great at delivering projects but constantly running out of cash before month-end, you’re not alone. It’s one of the biggest frustrations for UK construction business owners — especially when margins are tight, labour costs fluctuate, and clients pay on 30, 45 or even 60+ day terms.
The good news: running out of cash isn’t inevitable.
It’s usually the result of a broken financial system, not a broken business.
At Thomas Emlyn Ltd, we help construction companies build robust cashflow systems so month-end becomes predictable, not stressful.
Why do construction firms run out of cash before the end of the month?
Cash runs out because invoices aren’t issued fast enough, clients pay late, costs hit before income arrives, and no one is tracking cash weekly. Construction cashflow is naturally uneven — but without a proper system, the gaps turn into crises.
The most common causes include:
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Delayed invoicing
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No weekly debtor chasing
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Inconsistent or unclear payment terms
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Payroll and supplier bills hitting before income
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Lack of cashflow forecasting
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Retentions not being tracked
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Poor job costing — meaning underpriced work
Fix the system, and you fix the cashflow.
How can I stop running out of cash every month?
To stop cash running out, you need a weekly cashflow routine: invoice quickly, chase overdue debts consistently, track job profitability, monitor retentions, control spending, and forecast at least 13 weeks ahead. With the right system in place, cashflow becomes predictable and month-end becomes manageable.
1. Issue invoices immediately — not “when you get time”
Every day you delay invoicing is another day you wait to get paid.
Aim for same-day or next-day invoicing.
Use:
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Xero Projects
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SimPRO
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Tradify
Faster invoicing = faster cash.
2. Chase debtors weekly (not just when cash is tight)
A weekly debtor report should show:
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0–30 days
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31–60 days
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60+ days
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Retentions due
One construction firm we worked with recovered £76,000 in 10 weeks simply by introducing weekly debtor chasing.
3. Shorten your payment terms
If you’re still on “30-day EOM”, you’re funding your client’s project.
Look at:
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7-day terms
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14-day terms
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Staged payments
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Payment on completion of phases
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Deposits for materials
The Construction Act 1996 supports clear payment schedules — use it.
4. Track retentions in Xero
Retentions often hide in spreadsheets… and are forgotten.
Create a retention tracking account in Xero and review it every month.
A forgotten £20k retention can be the difference between stress and stability.
5. Build a rolling 13-week cashflow forecast
This is essential.
It shows exactly when money will run tight weeks before it happens, giving you time to act.
Tools:
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Float
- Cash Flow Frog
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Fathom
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A VFO-managed forecast
When you see the problem early, you can fix it early.
6. Know your monthly break-even number
You should always know:
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How much you need to bring in each month to break even
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What jobs are profitable
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What jobs are draining cash
Without this, you’re guessing.
7. Review job pricing and margins
If you run out of cash regularly, some jobs simply aren’t priced correctly.
Job costing tools help you fix this before it becomes a habit.
8. Build a cash buffer
Start small: aim for 5–10% of each invoice saved.
The goal: 1–3 months of overheads.
This protects you from late payers or delayed projects.
What tools or systems help stabilise monthly cashflow?
Tools like Xero, Float, Fathom, SimPRO, and GoCardless give you real-time visibility over jobs, invoices, and cashflow. When integrated properly, these systems prevent surprises and help you make informed decisions long before cash runs low.
Recommended ecosystem:
| Area | Tool | Why It Helps |
|---|---|---|
| Invoicing | Xero, SimPRO | Faster, phase-based invoicing |
| Job Costing | Xero Projects, Tradify | Accurate margins per job |
| Cashflow | Float, Fathom | Weekly forecasting |
| Payments | GoCardless, Crezco | Reliable payment collection |
| Debtors | Chaser, Satago | Automated reminders |
Construction companies thrive when all these tools work together.
What should I do if cash is already tight this month?
Act immediately: invoice everything possible, escalate overdue payments, pause non-essential spending, communicate with suppliers, and update your cashflow forecast. The goal is to stabilise this month while fixing the underlying system for the future.
Short-term actions that work quickly:
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Ask for stage payments
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Issue all unbilled work
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Chase overdue invoices daily
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Renegotiate supplier dates
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Review upcoming VAT/CIS liabilities
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Release due retentions
Short-term fixes help — but long-term systems prevent this happening again.
Why fixing your system is more important than working harder
Most cash problems aren’t caused by lack of work — they’re caused by lack of visibility. When you fix your cashflow system, you remove stress, protect margins, and gain confidence in taking on bigger projects without fear of running out of money.
Long-term benefits:
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Predictable month-ends
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Better supplier relationships
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Less stress at payroll time
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Higher margins
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Stronger growth capacity
Cashflow confidence is one of the biggest competitive advantages in construction.
How Thomas Emlyn Ltd helps construction firms stop running out of cash
Our Virtual Finance Office (VFO) is designed specifically for construction companies.
We provide:
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Weekly cashflow forecasting
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Debtor and retention tracking
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Job margin analysis
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Pricing support
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Finance systems setup
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Monthly director-level insights
You don’t need to fight cashflow fires every month.
You need a system that stops them happening in the first place.
FAQs
1. Why do I always struggle at the end of the month?
Often it’s timing — costs hit before income arrives. With weekly cashflow forecasting and faster invoicing, this problem reduces dramatically.
2. Should I use overdrafts or loans to manage cashflow?
They can help in emergencies, but they shouldn’t be the norm. A strong cashflow system is cheaper, safer, and far more effective long-term.
3. How quickly can cashflow improve with the right system?
Some firms see improvement in 4–8 weeks, especially when overdue debts are chased and invoicing is tightened.
4. What’s the biggest mistake construction companies make with cashflow?
Treating it as a monthly task. Construction cashflow needs weekly oversight, not month-end guesswork.
5. Can I fix this on my own?
You can — but having a specialist system and expert oversight is faster. A VFO creates consistency, accountability, and predictable cashflow.
Next Steps
If cashflow feels unpredictable — or you regularly hit a wall before payday — it’s time to fix the system, not work harder.
At Thomas Emlyn Ltd, we help construction businesses build robust cashflow systems that reduce stress and create sustainable growth.
📞 Book a discovery call here and we’ll walk you through your next steps toward stable, reliable cashflow.
Thomas Emlyn Ltd
Stronger Margins – Healthier Cashflow – Sustainable Growth
