Cameron Chapman July 30th, 2010

Better Time Management for Improved Cash Flow

We've all heard it: time is money. And as much as we sometimes hate to look at it in such base terms, it's mostly true. As service providers (designers and developers), the time we spend on a project is directly proportional to how much we're getting paid. How we spend our time also has a big effect on when money comes in. If we want to get a better grip on our cash flow, we need to get a better grip on our time first. Sure, we all recognize that the time we spend working effects our overall income. But it's often hard to see the relationship between time management and cash flow. Regardless of how muddy the relationship seems, there are direct ties between how you manage your time and how much money comes in when. Read on for more information on how to better manage your time so you can better manage your finances.

Take a Wide View

Time management is often dealt with on a micro level. We look at our time in blocks of fifteen, thirty, or sixty minutes, and assess how to best utilize those blocks. But when it comes to managing your time with an aim toward more stable cash flow, this micro-management doesn't do much good. What you need to do is take a macro view of how you're spending your time, and manage it based on when you need to complete billable work. Rather than looking at time in blocks that make up a fraction of your day, look at it in terms of what you're doing this week or this month.

Regular Billing Intervals

One thing you'll want to consider when planning your long-term time management is the frequency at which you'll be billing clients. There are a few things to take into account here. One has to do with how many projects you have going, and how staggered they are. Ideally, you'll want your projects to overlap in such a way that you can send out bills on a weekly or bi-weekly basis. This means you'll have money coming in virtually every week, which is a big plus for any freelancer's cash flow. The other thing to consider is how often clients are billed for work. Some designers might only bill their clients at the end of a project (in addition to a deposit up front, of course). While this results in larger payments, it also means payments are coming in less frequently. You'll need to decide if you can justify billing more often during the project. Breaking down the project's fee over three payments can not only aid your cash flow, but also your client's. Again, the goal here is to have money coming in on at least a semi-regular basis. Many freelancers will want payments arriving on a weekly basis, so there's less budgeting involved. Others might prefer to have larger payments coming in less frequently. You'll need to work out which system works better for you and the types of bills you have and then plan your projects so deadlines and billing cycles correspond with your desired payment schedule.

Set Goals and Work to Deadlines

Goals and deadlines are two of the biggest tools in your time management arsenal. Putting them to the best use take some practice, though. You'll want to set both long-term and short-term goals. Your short-term goals might include things like finishing up a project or landing a new client. Your long-term goals might be income-related or have to do with purchasing new equipment, hiring an employee or two, or expanding your services. Your goals don't need to be set in stone, but you should have an idea of where you want your business to go, and then make sure you're allocating enough time to certain projects or activities that will help you reach those goals. Some people opt to put their goals up where they can see them. Others don't bother writing them down, even. Either way is fine, just make sure you know what your goals are and what you need to do to move toward them. Goals don't have to be set in stone. There are people who are resistant to setting goals, as they feel like it might limit them and make them miss other, better, opportunities. That doesn't have to be the case, though. Just because you've set a goal doesn't mean you can't change it or adapt it if you're wants or needs change. The goal's true purpose is just to keep you moving forward and give you something to aim for.


On most projects, you'll have a timeline or deadline you have to work to. But sometimes a client is more lax about when their website needs to be done, giving you a deadline that's months away. This can wreak havoc with your work schedule and your cash flow. So set a deadline that's more closely tied to when you can realistically finish the project. It's also a good idea to set deadlines for yourself for stages within each project, especially for milestones that will trigger a payment. Set deadlines for things like invoicing and making any collections efforts, too. You should aim to send invoices as soon as possible, but setting a deadline of 1-2 days after work is complete (and/or approved by the client) is a good practice to get into. You at least want to be sending invoices on a weekly basis to ensure you have a steady cash flow.

Establish Good Habits

If you want to keep a steady flow of cash coming into your business, you'll need to develop some good habits. Habits are necessary because they become second-nature after awhile. When you're in the habit of doing something, it's automatic; you no longer have to think about doing it. While habits aren't necessarily essential (a good to-do list can replace them), they will make your business run smoother. There are some habits you may want to develop that have little to do with your cash flow directly. Things like starting and ending work at the same time each day, taking regular breaks while you're working, and taking time off are all good habits to get into, but they won't have a direct impact on your cash flow. However, these habits all serve to make you more productive, which will have a positive impact on your cash flow and other aspects of your business.

Send Invoices Regularly

In order to have money coming in, you have to ask for it. That's what invoices do. Depending on the volume of your business and how tight your budget is, you may want to dedicate a few minutes at the end of each day to preparing invoices, or a couple of hours one or two days each week. You also might consider getting in the habit of taking time as soon as a project (or part of a project) is finished to prepare the invoice, before moving on to the next project. Another option is to keep a running invoice for each project, adding hours or other billable items to it as you complete them. This way, when you reach a billing trigger, the invoice will be ready and all you'll need to do is print it out or email it.

Other Bookkeeping Tasks

Keeping track of bills and outgoing money is just as important as keeping track of income. You need to know when your bills are due or when to expect an expense so you can prepare for it and make sure the money is available. There's nothing worse than getting a big payment for a project and then realizing you have to send three quarters of it off for your rent or some other bill. The same goes for taxes. Get in the habit of keeping track of how much money you'll owe for taxes and taking that percentage out of each payment that comes in. Considering in many countries you may pay anywhere from 25% to 50% of your income to taxes, this is vital to making sure you have a stable cash flow and won't get hit with a huge bill when tax time rolls around. Taking a few minutes each day or an hour each week to make sure your finances are in order is vital to making sure you have a stable budget and a stable business. If you're constantly having to scramble to make payments on things, set aside the time to better manage your finances.

Respond to Requests Promptly

Sometimes the reason between you getting a contract and your competitor getting it has more to do with how quickly you respond than with the actual proposal. Once a client makes a decision to go ahead with a website redesign, in many cases they want to dive right in and get started. If you turn around and get a proposal to them within a few days, and your competition takes a week and a half, they might sign with you before they even receive the other proposal. It's a good idea to get into the habit of taking some time whenever a request for a proposal comes in, and deciding right away whether it's something you want to respond to or not. If it is, take the time to gather any additional information you need and put together the proposal right away. More work will almost inevitably help your cash flow (provided, of course, your new client pays their bills when they're supposed to).

Keep Better Track of Your Time

Tracking where your time goes helps to eliminate wasted time. Now, that doesn't mean every single minute you're sitting at your desk has to be spent in the most productive way possible, but if you track your time and find you're spending more time on Facebook than actually working, you should probably make some adjustments. There are dozens of time-tracking apps and methods out there. Any of these can be used to better determine where your time is being spent. I'd suggest keeping track of your time for at least a week before you make any adjustments. A month is better. After all, you might find that you're less productive on a certain day of the week, but on other days you completely make up for it. The other big advantage to accurately tracking your time is that you'll be able to create more accurate estimates for your clients, and you'll be less likely to undercut yourself. Maybe you think a certain web design task will only take you an hour, but when you actually look at the time you're spending on it, it's taking you three. While you might not be able to bill for the difference on your current project, at least you'll know to bill more for the next one.

Make Adjustments as Needed

Time management is a constant process, not a one-time project. You can't just set up a schedule and expect it to work for the next five or ten years. You'll need to review where your time is going on a regular basis, monthly or bimonthly is usually a good schedule, and make sure you're not only not wasting time, but also billing for the time you've spent on particular projects. By better managing your time, you can make sure that your cash flow is more consistent, and that you have money coming in when you need it. And the only way to effectively manage your time is to review, on a regular basis, where your time is needed, where it is most effectively spent, and where it is being wasted.

Cameron Chapman

Cameron Chapman is a professional Web and graphic designer with many years of experience. She writes for a number of blogs, including her own, Cameron Chapman On Writing. She’s also the author of Internet Famous: A Practical Guide to Becoming an Online Celebrity.


  1. Amazing tips! This is a well written article, and has very valuable information. I’m really amazed that this information is completely free!

  2. Thanks Cameron for this useful post. It’s hard to keep and healthy Time Management sometimes but this kind of post make it easier.

  3. I totally agree with all your points, I would also suggest to plan efficiently, you can take a look at this planning software, – cheers and keep posting :)

  4. yes. thankz too, but i’m not sure that i can do your advice.

    um, i’m a lazy man :) and i always forget to doing my self-writed plan :)

  5. tracking a money and managing money is key for cash flow. ofcourse forecasting is essential as well.

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