Being flat out should mean the bank account is looking pretty healthy. Sometimes it does. Other times you have jobs everywhere, materials going on the account, wages or contractors to pay, fuel disappearing at an impressive rate, and you are still wondering where the money went.
The problem is simple: more work creates more admin at exactly the point when nobody has time to do it. Jobs need to be closed off, extras captured, invoices sent, progress claims submitted and overdue accounts followed up, all while the next job has already started.
Xero’s latest NZ small-business data showed businesses were still waiting weeks to be paid after invoicing, with payments also arriving late on average. So even once the invoice goes out, the cash may still be a while away.
A job gets finished Tuesday and you think, “I’ll invoice that Friday.” Friday disappears. Monday is chaos. By Wednesday you finally get to it, assuming you can still remember exactly what went on the job and whether that extra couple of hours was approved. Meanwhile, the materials, fuel and labour have already been paid.
Then there are the small extras. Another site visit, a few more materials, an hour that became three, or the “quick extra job” agreed while everyone was standing around talking. One missed $80 item will not sink a business, but twenty of them are no longer loose change. “I’ll remember to add that later” is also not an accounting system.
A full workload can hide the problem because sales, profit and cash in the bank are not the same thing. You can be making money on paper while cash is tight because your costs have already gone out and your customers have not paid yet.
The Government’s invoice-payment targets make the same point from another angle. Agencies are expected to pay most domestic invoices within 10 working days, with faster targets for eInvoices, specifically to help improve business cash flow.
In a lot of smaller businesses, one person becomes the system. They know which jobs are finished, what extras need charging, who owes money and which customer needs their invoice sent to a completely different email address for reasons nobody fully understands. That works until the business gets busy, and then the same person is also quoting, answering calls, sorting staff and trying to remember whether Thursday’s job was ever invoiced.
At that point, the answer is not a better memory. It is a simple process.
When a job is finished, there should be a clear next step: check what was done, capture the extras, invoice it, make sure it went to the right person, then follow it up if it is not paid. Boring is good here. The less this relies on memory, the better.
NorthForge can help with the practical side of that, including invoicing, payment follow-up, accounts receivable, job-close processes and simple admin systems that show what has been done, what has been invoiced and what is still outstanding.
Because being busy is good. Being busy, doing the work, paying all the costs and forgetting to send the bill is considerably less useful.
