Tree service
Tree Service Cash Flow Calculator
Works cash flow, where equipment payments arrive whether the weather cooperated or not.
Result
Profit and cash are different things and a growing contractor can run out of cash while profitable, because the work is paid for before the invoice is. This models collection speed, not seasonality.
Get a Free Business AuditHow the calculation works
Invoiced amounts against the days customers actually take to pay, with costs paid out monthly and the opening cash balance, giving the funding gap and the months of runway. The tree care specific pressure is that the cost side is heavily fixed and dated: equipment finance payments, insurance instalments and payroll fall on schedule regardless of whether a fortnight of wind stopped work.
What moves the number
- Days customers actually take to pay against your terms.
- Equipment finance and insurance payment dates.
- Payroll frequency, which is weekly or fortnightly in this trade.
- Seasonal revenue variation against level fixed costs.
Where this one goes wrong
The combination that causes trouble is weekly payroll against slow-paying customers in a seasonal trade. Crews are paid weekly while residential customers take whatever they take and commercial ones take longer, so the business funds the gap continuously, and a quiet month on top of that is when it bites. Taking deposits on large removals, and payment on completion rather than on terms for residential work, is the main protection and it is a normal expectation in this trade. Reserving storm season surplus specifically for the quiet months is the other.
Before you quote
- Take deposits on large jobs and collect residential work on completion.
- Map finance and insurance payment dates against expected receipts.
- Reserve storm season surplus for the quiet months.
Questions
About this calculator
Why do tree services run short of cash while busy?
Weekly payroll against slow receipts. Crews are paid weekly while customers take their own time, so the business funds the gap continuously. Add equipment finance and insurance instalments on fixed dates and a quiet fortnight, and a profitable business can struggle to make payroll.
Should I take deposits?
On large removals, yes, and it is a normal expectation in this trade rather than an imposition. For residential work, collecting on completion rather than offering terms removes most of the receivables problem, since the crew is on site and the work is visibly done.
How should storm revenue be handled for cash flow?
Reserved deliberately for the quiet months rather than spent on capacity. Storm work produces a surplus at exactly the time it feels affordable to buy another chipper, and the quiet season that follows is when that payment becomes the problem.
The formula
cash tied up = daily invoicing x days to get paid
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How to use this calculator
- Invoiced per month ($). Enter your own figure; the page starts at $37,000.
- Payment terms (days). Enter your own figure; the page starts at 30.
- Days customers actually take. Enter your own figure; the page starts at 46.
- Costs paid out per month ($). Enter your own figure; the page starts at $38,000.
- Cash in the bank now ($). Enter your own figure; the page starts at $22,000.
The result updates as you type, so you can try a figure, see what it does to days of funding gap, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Invoiced per month | $37,000 |
| Payment terms (days) | 30 |
| Days customers actually take | 46 |
| Costs paid out per month | $38,000 |
| Cash in the bank now | $22,000 |
What comes out
| Result | Value |
|---|---|
| Days of funding gap main result | 16 |
| Cash tied up in invoices | $56,733 |
| Monthly surplus | -$1,000 |
| Months of cover | 22.0 |
There is $56,733 sitting in unpaid invoices, and customers take 16 days longer than your terms allow. That gap is the money you are lending them for free.
How sensitive the answer is
Holding everything else steady and changing only invoiced per month, this is what happens to days of funding gap. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Invoiced per month ($) | Days of funding gap |
|---|---|
| $18,500 | 16 |
| $27,750 | 16 |
| $37,000 example above | 16 |
| $55,500 | 16 |
| $74,000 | 16 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Invoiced per month ($)
- A money amount, starting at $37,000.
- Payment terms (days)
- A number, between 0 and 180, starting at 30.
- Days customers actually take
- A number, between 0 and 365, starting at 46.
- Costs paid out per month ($)
- A money amount, starting at $38,000.
- Cash in the bank now ($)
- A money amount, starting at $22,000.
What the results tell you
| Result | What it is |
|---|---|
| Days of funding gap | The headline result. A number. |
| Cash tied up in invoices | A money figure. |
| Monthly surplus | A money figure. |
| Months of cover | A decimal figure. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.