063 How to get the cash flowing inside your business

Send me a Text MessageGet cash flow moving with payment plans?I'm no financial advisor so do speak to your accountant before implementing a payment plan. Example your contract says cancellations 6 months before the wedding with incur 50% of the fees being forfeited by the couple, a cancellation 3 months before the wedding will incur 75% of fees being forfeited by the couple and any cancellation in the final month will result in 100% of the fee being forfeitedSo you need to make sure you have the right money in your account at those cancellation points. Go back to your legal fairy godmother ep048 for more detailsSo taking our example of £300 retainer and a £1500 package based on a booking 18 months out for the wedding date 7th Jan 2023 they book and pay the retainer in July 2021. The retainer is a separate fee it is paid at the time of booking I would suggest a 14 day cooling off period after which that money is non-refundable. That money is then part of your cash flow. Option 1:We now need to start collecting the £1500 for the package cost.You will need to have taken £750 by the time 6 months before the wedding date. So divide £750 by the months between the month after they book and 6 months out which would be July 2022.Not including this month as they paid their retainer, that leave 11months months£750 Divided by 11 = £68.18 per month starting 1st of AugustIf they were to cancel after July 2022 and before October 2022 they would need to forfeit the money they had paid so far. Then you would require a one off payment of £375 3 months before the wedding which gives you the 75% should they cancel after that date and finally another £375 the month before the wedding.Doing this you are ensuring you have all of the money you are owed at the point of cancellation in your bank.ORYou need to have £1125 in the bank at the 3 month mark to cover the 75% divide the £1125 by the number of months between the booking month and 3 months out from the wedding don’t include the booking month use this number or 12 months whichever is shorter remember we can only do payment plans for 12 months. In our example the number of months is 15 so we use 12.£1125 by 12 = £93.75per month starting on the 1st of AugustThen a final payment of £375 would be due the month before the wedding.This way is the simplest and easiest and requires the least amount of effort on both parts, as you are doing the 12 payments then collecting one final payment rather than 2. with 18 months until the wedding you will actually hold 75% of the total fee by the 6 month cancellation point so if they were to cancel you would owe them the 25% back. Build a contingency pot for those odd cancellations I would suggest keeping a third of all payment plans for the first 6 months to a year in this pot that would give you a good contingency fund. It would depend on how many bookings you have, you just want to make sure you have some money in a pot that could cover cancellations should they happen.I would also recommend having all payment plans set up for the 1st of the month. This means you just have one day a month where you need to sit down and just check that all clients on a plan have paid their payment. If you use bookkeeping software like Fresh books you can set up an automatically recurring invoice that they can pay instead of requiring them to set up a standing order this can make it much easier when it comes to tax season and for keeping track.For the free download Increase your income with these 5 ideasGo to the webpage for the full write up.FREE 3 Part Audio - Access Here www.donnaeade.comSupport the showPodcast Equipment Recommendations MY KITFEA Create Simple all-in-one web, CRM, email systemFor graphics CanvaJoin the Pod Squad in the FB GroupMy MIC ACTION PODCAST - here is a link to SpotifyRead from My Book Shelf & My Guests Book Shelf Want to Guest? Apply here >>FORMEdited and produced by Donna EadeThank you for your support:)Until next week, Bye for Now XoX