Start with three different questions
Sales tell you what has been sold. Contribution shows what remains after the direct costs of delivery. Cash tells you whether money is available when payments fall due. Reviewing one without the others can leave an important part of the picture unexplained. Business Wales distinguishes cash movement from accounting profit in its guidance on cashflow forecasting.
Follow the timing
Take one typical job. When is the customer invoiced? When is payment expected? When must suppliers and staff be paid? Put those dates beside the amounts. A growing order book may require spending before the associated receipts arrive. The useful question becomes when the gap opens and how large it could be.
Use a small worked example
Illustration only: work invoiced at £10,000 has £6,000 of direct delivery costs. That leaves £4,000 of contribution before overheads, tax and financing. If the £6,000 is paid before the customer pays, contribution alone does not describe the cash requirement. This example is not a forecast or a client result.
Make the review actionable
Compare expected and actual receipts, identify overdue invoices and record the assumptions behind upcoming payments. Assign a person and review date to each material uncertainty. A forecast is more useful when it prompts a specific action than when it simply produces another total.
One job. Three different views.
Assume £10,000 is invoiced for completed work. £6,000 of direct costs must be paid in week one; the customer is expected to pay in week four. No other cash movements are included.
| Review lens | What the example shows | What it does not establish |
|---|---|---|
| Revenue | £10,000 invoiced | When the cash is received |
| Contribution | £10,000 − £6,000 = £4,000 | Net profit after all business costs |
| Cash timing | £6,000 paid before the £10,000 receipt | The business’s total cash position |
Direct costs paid
Receipt still outstanding
Assumed customer receipt
The timing illustration assumes the receipt arrives as expected. It is not a financing recommendation. Business Wales supports the distinction between profit and cashflow; these numbers and the presentation are Tresswell’s own illustration.
Map the receipt and payment dates for your next three significant jobs. Review the largest timing gap before committing further spending.
Further reading: Business Wales: Cashflow forecast ↗. Accessed 8 November 2026.
External sources inform the points attributed to them. The practical application and examples are Tresswell’s interpretation. No endorsement is implied.
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