Cash Flow for Joinery Businesses

The profitable-but-broke problem

A joinery business can show consistent gross margin and still run out of cash. The reason is usually timing — materials purchased and labour paid before clients have paid invoices. In a business with 45-day debtor terms and 7-day supplier terms, cash is always leaving faster than it's arriving.

The deposit structure solution

The most effective cash flow protection is a deposit that covers material costs before you purchase them. A 40–50% deposit on signing, a 40% progress claim at installation, and 10–20% on completion keeps cash positive on most jobs. Builders often push back on this — but it's a standard term for most trade contractors and you should hold it.

Managing debtors

Issue invoices promptly — not at the end of the month, but when the trigger event happens. On completion. On installation. On material delivery. The longer the gap between the event and the invoice, the longer the gap between the invoice and payment. A 7-day payment term issued immediately is better than a 30-day term issued three weeks late.

Seasonal patterns

Most joinery businesses have seasonal cash flow peaks and troughs aligned with the construction calendar. Q4 (Oct–Dec in Australia) is typically the strongest revenue period. Q1 (Jan–Mar) is often the thinnest. A cash reserve built during strong periods to cover the January trough is standard financial management.