5 tips for housebuilders to maintain a healthy cash flow

With labour and material costs rising resulting in lower margins, there are significant financial challenges ahead for UK housebuilders. Now more than ever it is important to have a healthy cash flow. So here are our top tips for you to consider moving forward in the future:

  • Use bookkeeping and a comprehensive accounting system, this will help give you a precise idea of what income and expenses are expected in the future. For more information go to Lloyds Bank Business Toolbox.
  • Spreading costs when buying materials will leave you with more cash for operations. Negotiate prices when buying large quantities and get quotes from different suppliers as well as asking for a discount.
  • Labour costs: retaining staff is cheaper than hiring new staff especially with rising construction skill shortages. We also recommend saving money by investing in technology to automate repetitive tasks.
  • House builders receive a significant amount of invoices. Switching to an electronic, integrated invoicing system will save you important funds over time, money that could go back into your business.
  • Staff training: In the housebuilding industry 85% of the cash comes from work in progress, which means performance depends on the project manager’s cash flow management.

Are you looking to grow? We partner with small housebuilders and developers who are developing on average between 5-175 units per year. For more information visit our criteria page.