Written for owners of UK cleaning businesses: contract cleaners for offices, schools, healthcare and soft FM subcontracts, domestic cleaning firms, agencies and apps, and specialists in after-builders, end-of-tenancy, window, carpet and biohazard cleaning.
The short version
- Work out the cash the wage gap needs.Multiply monthly labour cost by the days from first wages to cash received, then divide by 30. That rough figure is the cash you need.
- Forecast cash week by week for 13 weeks.Put each client's money in on the day it really pays, not its terms. Add payroll, VAT quarters and set-up costs for new contracts.
- Fund the gap, never from PAYE or VAT.Invoice in advance where the contract allows, use an overdraft or invoice finance, and call HMRC before a due date you cannot meet.
In contract cleaning, wages go out weekly or monthly in arrears, while clients are invoiced monthly in arrears on 30 to 60 day terms. So you pay for weeks of cleaning before any of it is paid for, and every new contract adds mobilisation costs before its first invoice.
A rough measure of the cash you need: monthly labour cost x the days from the first wage payment to cash received, divided by 30.
| Days 1 to 30: the first month of wages | £50,000 |
| Days 31 to 60: the second month, with the first invoice still unpaid | £50,000 |
| Days 61 to 75: wages until the first payment lands | £25,000 |
| Working capital tied up | £125,000 |
£50,000 x 75 / 30: invoiced at month end and paid 45 days later, cash lands about 75 days after the first wages. Invoicing monthly in advance, where the contract allows, removes most of it.
Run a 13-week cash forecast
One row a week. Put receipts in by contract on each payer's actual behaviour, not its terms, then add every outgoing and every known jump:
- Payroll, with PAYE and National Insurance to HMRC by the 22nd when paid electronically, and pension contributions by the 22nd of the following month.
- The VAT quarter, insurance instalments and van leases.
- The April pay rise, and the real Living Wage implementation date on accredited contracts.
- Mobilisation on a new contract: uniforms, kit, DBS checks and training hours, all paid before its first invoice.
The wage gap is what an overdraft or invoice finance is for; PAYE and VAT never are.
Funding that fits contract cleaning
- An overdraft or revolving facility for the wage cycle itself.
- Invoice finance (factoring or discounting), which suits contract cleaning because your debtors are businesses and public bodies. Read the facility letter for concentration limits on one large debtor.
- Asset finance for machines and vans.
- The British Business Bank's Growth Guarantee Scheme, which sits behind some lenders' loans.
Get public-sector money on day 30
Public contracts and their subcontracts pay in 30 days
For procurements started from 24 February 2025 in England, Wales and Northern Ireland, the Procurement Act 2023 implies payment of valid, undisputed invoices within 30 days into public contracts, and into subcontracts under them. So a facilities company holding such a council or NHS contract must pay its cleaning subcontractor within 30 days, whatever its own terms say. Scotland has its own procurement law. As of Oct 2026.
Procurement Act 2023 ss.68 and 73
Statutory interest on late business invoices
A business client that pays late owes simple interest at 8% over the reference rate (Bank Rate of 3.75% on 30 June), 11.75% a year in all for debts falling due from 1 July to 31 December 2026, plus fixed compensation of £40, £70 or £100 per invoice by size, unless the contract gives a substantial remedy. It never applies to a household. As of Oct 2026.
Late Payment of Commercial Debts (Interest) Act 1998 ss.5A and 9
| Statutory interest: £24,000 x 11.75% x 30 / 365 | £231.78 |
| Fixed compensation for an invoice of this size | £100 |
| Claim on one invoice paid 30 days late | £331.78 |
Write to the facilities company citing section 73 of the Procurement Act 2023, and chase from day 31 with the statutory interest figure: the subcontract term is 30 days, not 60.
Households are different: take payment by card on booking, or by direct debit after each clean. Chasing small balances costs more than they are worth.
Set up one tracking category in Xero, or one class in QuickBooks, for each contract. Each contract's profit and loss then shows its own labour, consumables and margin after the April rise, so you can see which site is draining the cash.
Asked in Greymill
The real problem is the wage gap:
Wages start on day 1, you invoice on day 30, cash lands about day 75
£50,000 x 75 / 30 = £125,000 tied up
Fund that gap properly: an overdraft, or invoice finance (cash raised on your unpaid invoices). Invoice finance suits cleaning because your clients are businesses. Check the facility letter for a limit on any one big client.
Easy to miss: invoicing monthly in advance, where the contract allows, removes most of that £125,000.
Then a 13-week forecast: one row a week, each client's money in on the day it really pays, not on its terms. Want me to build it with your PAYE and VAT dates in?
Ask it about your own business
Paste this into Greymill with your own figures, and Cash & Profit works it through for your business.
I run a cleaning business in the UK. My wage bill is about [amount] a month, paid [weekly or monthly]. My main contracts are [client, monthly invoice value, payment terms, and how many days they actually take to pay]. I start a new contract on [date] with mobilisation costs of about [amount]. Build me a 13-week cash forecast, tell me how much working capital the wage gap needs, and draft a letter to [client] for any invoice that is overdue.
More for cleaning and facilities in the UK
- Pricing a cleaning contract that still pays after holidays, on-costs and next April's riseBuild a contract cleaning price up from the specification, so holiday weeks, employer costs, supervision, margin and next year's wage rise are paid for rather than absorbed.Read the lesson
- Why the builder took tax off my sparkle clean, and the VAT scheme that costs cleaners moreAn after-builders clean is a construction operation, so the main contractor deducts CIS and may need a reverse-charge invoice, and a labour-only cleaner on the Flat Rate Scheme usually pays more VAT, not less.Read the lesson
- The safety, waste and key rules that apply on every cleaning siteThere is no licence to clean in the UK, but chemicals, work at height, sharps, asbestos, waste and keys all carry rules, and an accident or a lost key is when you find out whether you followed them.Read the lesson
- Winning or losing a contract when the cleaners come with itWhen a cleaning contract changes hands, TUPE usually moves the cleaners with it on their existing terms and history, so your bid, your timetable and the contract all have to allow for them.Read the lesson
- Paying cleaners for every minute the minimum wage countsTravel between houses, unpaid set-up minutes, uniform deductions and the wrong kind of holiday pay are how cleaning firms underpay without meaning to.Read the lesson
- Bidding for school, council and NHS cleaning when the tender is scored, not just pricedPublic and facilities work is won on a scored tender: registration on the Central Digital Platform, social value you can prove, the standards buyers check and an answer library kept ready.Read the lesson
- HMRC says VAT is due on the whole fee, and a cleaner says she was a workerA domestic cleaning agency or app that sets the price, takes the money and promises the clean is usually the principal and often the employer, whatever the paperwork says, and the VAT and pay bills follow.Read the lesson
Open the interactive lesson · Every cleaning and facilities lesson · What Greymill knows about the trade
Sources
The primary sources behind this lesson, checked Oct 2026.
- Pay PAYE; TPR contributions guidance (Cash and funding)
- If you cannot pay (Cash and funding)
- scheme page (Cash and funding)
- s.68(1); s.73(1), (6) (Cash and funding)
- ss.1, 5A, 9; SI 2002/1675 (Contracts and payment: commercial and domestic)
- ss.49, 50, 52, 54 to 56, 62 (Contracts and payment: commercial and domestic)
- regs 30, 31, 36(4), 36(6) (Contracts and payment: commercial and domestic)
- Sch 20; Part 4 Ch 1 (Contracts and payment: commercial and domestic)
- Part 4 Ch 2 (Contracts and payment: commercial and domestic)
- reg 3(2A); LGPS reg 64 (Hard cases: TUPE, CONTRACTS and TENDERS)
- Kimberley [2008] ICR 1030 (Hard cases: TUPE, CONTRACTS and TENDERS)
- s.73(1); SI 2024/716 reg 5(3), (4)(a) (Hard cases: TUPE, CONTRACTS and TENDERS)
- 2026-27 rates, announced 15 October 2026, implement by 1 May 2027 (Hard cases: TUPE, CONTRACTS and TENDERS)
- Employment Rights Act 2025 Sch.12 para.13; SI 2026/954 reg.4 and Schedule table 2; TUPE reg.12(2) and (6) (Hard cases: TUPE, CONTRACTS and TENDERS)
- Reporting (Pay, TUPE, VAT and CIS dates)
- Current rates (Pay, TUPE, VAT and CIS dates)
- Deadlines (Pay, TUPE, VAT and CIS dates)
- Re-enrolment duties (Pay, TUPE, VAT and CIS dates)
- End of year (Pay, TUPE, VAT and CIS dates)
- ss.51, 68, 73; Schs 6, 7 (Winning work: tenders, the procurement act and standards)
- PPN 002, published 13 February 2025; in-scope organisations apply a minimum 10% weighting of the total score for social value (Winning work: tenders, the procurement act and standards)
- accreditation criteria (Winning work: tenders, the procurement act and standards)
- SSIP; PPN 09/14 (Winning work: tenders, the procurement act and standards)
- Service Provision Change (Protection of Employment) Regulations (NI) 2006 (Read the user, which nation and switch rules)
- whole Act; SSI 2015/446 (Read the user, which nation and switch rules)
- Fair Work First criteria (real Living Wage) (Read the user, which nation and switch rules)
- start date (Read the user, which nation and switch rules)
- whole Act (Read the user, which nation and switch rules)
- current Bank Rate and MPC dates (Read the user, which nation and switch rules)