Thanks in advance for replies to this. I am an owner engineer and I contract out to companies for services. Recently started a change where I am going to work 11/27-12/29 and invoice on 1/5/24 and then wait until 1/29/24 for the invoice to be paid. My recent contract I was invoicing weekly and getting paid net 7. What are options to bridge that cash flow delay and keep my bills paid? I am not keen on paying interest on a loan but I also am not aware if it is a write-off or not.
Not trying to mean to you at all, but a business that can’t shoulder a 2 week delay in payroll is an enormous red flag. If I were in your shoes, I would absolutely buckle down - you’re eating chicken and rice for dinner. ham and beans. Cooked at home. Zero eating out. Zero random gas station food purchases. And get your cashflow to where if all revenue stops you can pay yourself/staff at least 4 months.
I am a single member company, started in March and contract out to companies at 12 month/40 hour/week clip. Got offered a new contract that is good for the next 3 years, 9 months into current contract. So I wasn’t budgeting cash in the business for the change in cash flow, assumed (incorrectly) all were able to bill weekly. So maybe it’s a red flag however I am looking for answers on what to do in this given situation.