Good cash flow for tradies comes down to one thing: getting money in before, or soon after, money goes out. Most trade businesses that run short of cash aren't losing money on their jobs. They're paying for materials, fuel and wages weeks before the customer pays them, and a few big jobs at once stretch that gap until the account runs dry.
This guide shows where the gap comes from, then eight ways to close it.
Where the gap comes from
Take one job: $12,000 including GST, three weeks long. Materials cost $4,000 up front and you pay an apprentice $1,200 a week. You invoice when you finish, on 30-day terms, and the customer pays a week late.
| Week | What happens | Running balance |
|---|---|---|
| 0 | Materials bought | minus $4,000 |
| 1 | Wages | minus $5,200 |
| 2 | Wages | minus $6,400 |
| 3 | Wages, job finished, invoice sent | minus $7,600 |
| 4 to 7 | Waiting on 30-day terms | minus $7,600 |
| 8 | Customer pays | plus $4,400 |
The job left $4,400 after materials and wages, before GST and income tax. But for five weeks you carried $7,600 of the customer's costs yourself. Run two or three jobs like that at once, add a slow payer, and a profitable business can't pay its own bills.
Now the same job with a 5 percent deposit, a progress payment halfway and 7-day terms on the balance:
| Week | What happens | Running balance |
|---|---|---|
| 0 | $600 deposit in, materials bought | minus $3,400 |
| 1 | Wages | minus $4,600 |
| 2 | Wages, $6,000 progress claim sent | minus $5,800 |
| 3 | Progress claim paid, wages, job finished, final $5,400 invoiced | minus $1,000 |
| 4 | Final invoice paid | plus $4,400 |
Same job, same margin. The worst point is $5,800 for one week instead of $7,600 for five, and you have your money four weeks sooner. Notice that the deposit is the smallest part of the fix. The progress payment and the short terms on the balance do most of the work.
1. Take a deposit on bigger jobs, within the legal limit
A deposit covers your materials and confirms the customer is serious. Ask for it on the quote, and say what it covers. On small call-out jobs a deposit is rarely worth the friction: invoice on the day instead.
Several states cap the deposit you can take on residential building work. These are the limits the regulators publish, as of October 2026:
| State | Maximum deposit on residential building work |
|---|---|
| New South Wales | 10% (NSW Government) |
| Victoria | 10% under $20,000, 5% at $20,000 or more (Consumer Affairs Victoria) |
| Queensland | 20% up to $3,300, 10% from $3,301 to $19,999, 5% from $20,000 (QBCC) |
| Western Australia | 6.5% on fixed-price contracts from $7,500 to $500,000 (WA Building and Energy) |
Whether your job counts as residential building work depends on your state's definitions, so check with your regulator if you're unsure. The 5 percent deposit in the example above sits within all four.
2. Use progress payments on anything over a few weeks
For longer jobs, agree stages up front: for example, a deposit, then a payment at rough-in, then the balance at completion. Put the stages and amounts on the quote so nobody is surprised. Each stage should be paid before the next starts.
3. Invoice the day you finish
Every day between finishing and invoicing is a day added to the gap. Make it a rule that the invoice goes out before you leave the site, or that evening at the latest. It's far easier when the job's labour and materials carry straight onto the invoice. For what has to be on it, see tax invoice requirements in Australia.
4. Shorten your payment terms
Thirty-day terms suit big businesses with accounts departments. A household customer can pay in seven days, or on completion. Set your terms on the quote, repeat them on the invoice, and put a clear due date on it rather than "net 7".
5. Make paying you easy
Put your bank details, BSB and a payment reference on every invoice. Send it as a link the customer can open on their phone. If you can, offer card payment as well. Every extra step between "I should pay that" and paying it costs you days.
6. Chase on a schedule
A polite reminder the day after the due date gets most invoices paid. A firmer one at seven days and a phone call at fourteen get most of the rest. The trick is doing it every time, not when you remember or when you're desperate. The full process is in how to chase unpaid invoices.
7. Set aside GST and tax as you go
Some of the money you receive isn't yours. If you're registered for GST, one eleventh of every GST-inclusive payment belongs to the ATO. On the $12,000 job above, that's $1,090.91.
Open a second account and move the GST, plus a percentage for income tax, across every week. Ask your accountant for the income tax figure that suits your business. When the BAS is due, the money is already sitting there, and a quarterly bill stops being a crisis.
8. Know your numbers every week
Spend ten minutes every Friday looking at three figures:
- Money in the bank, in both accounts
- Money owed to you, and how much of it is overdue
- Money you owe in the next four weeks: suppliers, wages, super, BAS
If the third number is bigger than the first two can cover, you know weeks in advance instead of on the day.
If you employ staff, super now moves with wages. Under Payday Super, from 1 July 2026 the super guarantee must reach each employee's fund within 7 business days of payday, rather than once a quarter. Plan for it as part of every pay run, not as a quarterly bill.
Build a buffer
Aim to keep one to three months of fixed costs in reserve: ute, insurance, phone, wages and rent if you have it. It takes time to build. Start by putting a set amount aside from every job, even if it's small. A buffer turns a slow month or a bad debt into an annoyance instead of an emergency.
The short version
Your jobs can be profitable and still leave you short, because the costs come first and the money comes last. Close the gap with deposits, progress payments, same-day invoices, short terms, easy payment and a chasing schedule. Set aside GST and tax every week, check three numbers every Friday, and build a buffer from every job.
Questions
Because they pay for materials, fuel and wages before the customer pays them. Several jobs at once, long payment terms and a slow payer can leave a profitable business unable to cover its bills for weeks.
Enough to cover the materials on bigger jobs, within the limits that apply where you work. For residential building work, New South Wales caps deposits at 10 percent, Victoria at 10 percent under $20,000 and 5 percent from $20,000, Queensland at between 5 and 20 percent depending on the contract value, and Western Australia at 6.5 percent on fixed-price contracts from $7,500 to $500,000.
Seven days, or payment on completion, is common for household work. Thirty-day terms are better kept for business customers with accounts departments. Put a clear due date on every invoice.
If you're registered for GST, one eleventh of every GST-inclusive amount you receive belongs to the ATO. Move it into a separate account each week, along with a percentage for income tax that your accountant gives you.