Industry sector: Business services

Courier service: Cash sales


'Cash sales' means all income which is received at the time - or before - a package is collected or delivered. While some of your customers may pay you in cash, remember that Cash sales can also include cheques, bank transfers and card payments.

To prepare your cash flow, you need to estimate how much income you will receive over the next 12 months, including VAT. To do this you will need to work out how many deliveries you are likely to make, at what price and when you will receive the money. You will also need to decide on the range of services you will offer and what you will charge for them.

There are a number of things to consider when you make your estimates:

Type of business

  • who will your customers be - domestic, business, or both
  • will you operate a single vehicle service as an owner driver, or do you aim to operate a fleet of vehicles
  • will you undertake subcontract work for a larger courier firm
  • will you obtain work online
  • will you use vans, motorcycles or even bicycles for deliveries (this will depend on the services you intend to offer)
  • what will your working hours be

Your services

There are a number of services you might offer your customers, such as:

  • immediate local delivery
  • same day national delivery
  • next day national delivery
  • cash on delivery service
  • international delivery (possibly together with another company)
  • night time delivery
  • international hand carry courier service by air or sea
  • storage facilities for goods prior to delivery
  • parcel tracking
  • returns service
  • cheque collection and banking
  • document sign and return service
  • product packaging or re-packaging

Pricing

  • what will your pricing policy be (don't forget, you must be able to at least cover your costs, overheads and drawings)
  • how often will you review your prices
  • will you offer account facilities
  • will you offer discounts and special offers

Seasonality

Bear in mind that demand for courier services generally varies throughout the year. Peak demand for delivering documents tends to occur towards the end of the financial year in March, while demand for home deliveries is greatest during the period leading up to Christmas.

To help with your decisions, click on the checkpoints for guidance. Once you have worked out a Cash sales figure add it to the relevant field in your cash flow forecast.