Tracking Your Money & Keeping Records

Understanding Cash Flow

Cash flow is the money moving into and out of your custom apparel business. Sales can look strong while cash is still tight. For example, a school spirit-wear order may bring in $12,000 in revenue, but you may need to pay $4,000 for blank garments, $2,500 for screen-printing supplies and labor, and shipping costs before the customer pays the final balance. Revenue is not the same as cash in the bank.

Think of your business as a water tank. Customer deposits, online store sales, and wholesale payments fill the tank. Blank apparel purchases, contract decorators, payroll, rent, software, shipping, refunds, and taxes drain it. If more leaves than enters, the tank gets low even when your order calendar looks full.

The Importance of Basic Records

Accurate records give you a clear view of each order and the business as a whole. Record the customer, order date, selling price, deposit, blank garment cost, decoration cost, shipping, sales tax, and remaining balance. This helps you see which jobs make money and which ones only create activity.

Keep business and personal spending separate. Save supplier invoices from companies such as SanMar, S&S Activewear, alphabroder, and local vendors. Match payments from your website, point-of-sale system, ACH transfers, checks, and card processor to actual orders. A clean record also makes tax filing, lender applications, and business valuation much easier.

Real-World Scenario

Imagine a decorator handling a 300-piece company uniform order. The quote is $9,600. The customer pays a 50% deposit, but the decorator immediately spends $3,200 on shirts and jackets, $1,400 on embroidery, and $500 on freight. If the owner counts the full quote as available money, they may use cash needed for payroll or taxes. By recording the deposit, job costs, and final payment dates, the owner can see the true cash position and the job's expected profit.

The Bootstrapper's Ledger

A simple weekly ledger is enough to start. Create one spreadsheet with separate sections for money received and money paid. List every customer payment, supplier bill, contractor invoice, payroll cost, shipping charge, refund, software subscription, and tax payment.

Add an order-level job-cost sheet for larger runs. Track quoted revenue, deposits received, blank apparel cost, decoration cost, packaging, freight, sales commissions, and the final balance due. Review unpaid invoices by age: current, 1-30 days late, 31-60 days late, and more than 60 days late.

This gives you two useful numbers. Your burn rate is the average amount of cash the business uses each month. Your cash runway is how many months the current bank balance can support normal expenses. For example, $24,000 in available cash divided by $8,000 in average monthly cash use equals three months of runway.

Forecasting and Decision Making

Forecast cash at least 13 weeks ahead. Start with the current bank balance. Add realistic customer deposits, final payments, online store sales, and wholesale receipts by the week you expect to receive them. Subtract blank garment purchases, contract production, payroll, rent, shipping, taxes, loan payments, and planned equipment purchases.

Use confirmed payment dates, not hopeful dates. If a sports league has not approved its invoice, do not count that money as certain. If a large order requires $6,000 in blanks next week, show that payment before deciding whether to buy a new embroidery machine or hire another production worker.

Set a minimum cash floor. Many apparel shops use a floor equal to four to eight weeks of fixed expenses. When the forecast falls below that floor, pause optional spending, collect deposits earlier, tighten quote terms, or delay equipment purchases.

Conclusion

Financial records turn a busy apparel shop into a manageable business. Review cash weekly, connect every payment to an order or expense, and check job profit before accepting work. A full production schedule does not protect you from a cash shortage. Knowing what is owed, what is due, and what each order really costs does.

A practical rule is simple: do not start a large custom order without a written quote, a deposit policy, and a cash forecast that covers the required blanks and production costs.