In this sector, busy isn’t the same as profitable.
And profitable doesn’t mean you have cash. That’s something you have to work on.
Shopfitting and fit-out work is manufacturing, installation, variations, project management and construction all at once. As specialist accountants for shopfitters and fit-out companies, based in Melton Mowbray, Leicestershire, and working with firms across the UK, we set up the finance systems that show you what each job is really making, where your cash has gone and what’s coming next. This is important to grow your business successfully.
- ACCA accountants
- Job costing & WIP
- CIS & VAT
- Xero & QuickBooks
Does any of this sound familiar?
Start with the hard questions.
The phone’s ringing and we’re winning jobs. So why doesn’t the profit add up?
Most shopfitters don’t lack work. Profit is lost between winning the job and delivering it.
The P&L says profit. The bank balance says stress.
You’re paying for materials and labour weeks or months before applications, sign-offs and retentions turn into cash.
We’ve hit a wall somewhere between £500k and £1m.
More jobs, more complexity, more admin. Cash tightens and the business starts running you.
I lose a day a week to invoices, CIS, VAT and the bank rec.
That isn’t a time problem. It’s a systems problem.
One big customer is setting our prices.
Without profit by customer, it’s hard to push back or know which work to chase.
Our accounts swing from a loss one month to a big profit the next.
Standard bookkeeping doesn’t account for work in progress, so your monthly figures can’t be trusted.
Turnover is vanity, profit is sanity, cash is reality.
Why shopfitting is different
One £100k job can leave you £70k out of pocket
Manufacturing + installation + variations + project management + construction
Take a typical three-month fit-out. The bespoke units are built in your workshop first, the costs hit before you invoice anything. The problems you could find are that you don’t know how much profit you’re making, and you need to be smart with your payment terms to avoid cash and funding shortfalls.
The same job, as a standard cloud accounting system reports it
Monthly profit as invoices are raised, without work-in-progress (WIP) adjustments, £k
The job makes £35k, at a 35% margin, every month it runs. A loss in January and a spike in April come only from the timing of costs and sales invoices. With proper WIP reporting, profit is matched to the work actually done, so every month shows a true margin. The problem is, at a turnover of more than £2m, if every job is accounted for this way in your accounting system, how do you know what the company as a whole is making each month?
How the £70k builds up
Cash paid out and received (including VAT) and your running bank position on the same £100k job, month by month, £k
Based on our worked example: costs split equally between materials and labour, VAT at 20% paid on materials and charged on sales invoices, three applications for a third of the £100k each less 4% retention, 60-day payment terms and retention released in September. VAT payments to HMRC aren’t shown.
How we fix it
The five finance systems every shopfitter needs
The shopfitters who scale well don’t do it through hustle alone. They have finance systems that work together, so they stop reacting and start leading. We build these five for you.
Financial foundations
Accounting software set up for job costing, not just for HMRC.
- Xero or QuickBooks set up to track job profitability and WIP
- Factory labour split from site labour, with materials, subcontractors, variations, rework and retentions coded separately
- Quick, accurate cost capture with Dext, Apron or using your Purchase Order systems better
Job costing & estimate vs actual
Stop margin leaks before they become losses.
- Every job starts with a budget broken down by cost area
- A weekly view of which jobs are on track, drifting or in danger
- Time to tighten scope, push variations or challenge costs while the money can still be protected
Work in progress reporting
The missing link between busy and profitable.
- Work completed, billed and costed to date on every live job
- Whether the customer is funding the job, or you are
- Margin so far compared with the quote
Payment runs & cash flow control
Run cash on purpose instead of firefighting.
- One controlled weekly payment run instead of ten rushed decisions
- A 13-week cash forecast covering suppliers, labour, VAT, CIS, retentions and funding
- Proactive debtor control
Monthly reporting & board meetings
Turn job data into decisions.
- P&L, WIP movements, job margins and cash forecast in one monthly pack
- Key risks flagged: retentions building up, slow payers, margin drift
- A monthly finance meeting to decide on pricing, scheduling, subcontract strategy and hiring
When all five work together
You see estimate vs actual as the work happens. WIP shows the true position of every project. Cash forecasts are built from real job data, not hope. Admin time drops because the finance side runs to a proper rhythm. You go from busy and stressed to busy, profitable and in control.
Small moves, big numbers
What is 1% worth to your business?
On £2m turnover at a 35% gross margin, one percentage point is £20k of gross profit, and spotting and billing every variation could add another 2 points. Every extra day your customers take to pay ties up about £6.6k, and every extra day you take to pay your suppliers keeps about £4.3k in your bank. Try your own figures.
Illustration only. Cash released assumes sales invoices include VAT at 20% (turnover × 1.2 ÷ 365 per day). Supplier cash assumes purchases equal to your cost of sales at a 35% margin, including VAT (turnover × 65% × 1.2 ÷ 365 per day), on longer terms agreed with your suppliers. More profit and a much bigger bank balance, all from working smarter, that’s how we help you.
Five reasons shopfitters miss target profit
Where profit goes.
Pricing
Cost-plus quotes checked against competitors to win the job, with no price for the value of delivering on time, to standard, without disruption.
What helpsPrice the job as specified and pick up the variations you’ve spotted once you’re on site.
Productivity & material yield
Factory hours overrun, site teams wait or rework, and waste creeps in through cutting, damage and poor estimates.
What helpsA chart of accounts that tracks job profitability and WIP.
The skills gap
Stretched or less experienced teams mean more mistakes, more rework and lower efficiency.
What helpsQuarterly team reviews, apprenticeships and standard processes so work is right first time.
Stalled sales growth
Sales stay reactive, so growth is inconsistent even when demand is there.
What helpsMonthly tracking of leads, conversion, order value, repeat business and new customers.
Key-customer dependency
A strong relationship slowly hands the customer control of your pricing and terms.
What helpsProfit by customer, so you can rebalance the pipeline and set firmer terms.
CIS for shopfitters
Is your shopfitting work caught by CIS?
Often, yes. The label “shopfitter” doesn’t decide it. What matters is whether the contract covers construction operations. HMRC lists fixed shelving, counters and partitions as within CIS, and treats shopfitting as a finishing operation. Supply-only and off-site manufacture with delivery only are outside it.
Splitting the invoice doesn’t split the contract
If any part of a contract includes construction operations, HMRC treats all payments under it as within CIS. A single design, supply and install contract stays in scope even if you bill the fitted items separately. The deduction is still taken only on the amount after your direct cost of materials, so keep good material records.
| Typical fit-out scenario | CIS position | What to do |
|---|---|---|
| Supply-only of freestanding display cabinets, no installation | Usually outside | Keep a genuinely separate supply-only contract, with no installation wording. |
| Fitting fixed counters, shelving and partitions on site | Usually within | Verify subcontractors, deduct unless gross payment applies, and issue deduction statements. |
| Bespoke joinery made in your workshop and fitted by you under one contract | Usually within | Show direct material costs separately and keep workshop, purchase and installation records. |
| Joinery made by you, fitted by a separately engaged installer | Maker usually outside Installer within | Use separate contracts with clear scopes. Avoid “overall fit-out” wording in the supply contract. |
| Seating, blinds, shutters or carpet only | Outside if isolated | Contract separately. Bundled with in-scope fit-out work, they can be pulled into CIS. |
| Static shop sign with no electrical features | Usually outside | Record the specification. Illuminated or electrical signs are within CIS. |
Monthly CIS returns are due by the 19th, including nil returns, and late filing can cost you gross payment status. This is a general guide based on HMRC guidance and the Finance Act 2004. Every contract is different, so talk to us about yours.
Your Virtual Finance Office
A full finance team without the £240k salary bill
To grow properly, you need every one of these skills. Most growing shopfitters can’t justify them all full-time, so a bookkeeper ends up covering FD work, or a financial controller ends up doing supplier payments.
Our Virtual Finance Office gives you the whole team, often for less than the salary of one full-time junior. If you already have good people, we work with them and fill the gaps.
Average UK salaries, indeed.com.
Pick the support you need
How we work with shopfitters and fit-out companies.
Virtual Finance Office
Bookkeeping, CIS, VAT, payment runs and job-costed management accounts. The foundations everything else is built on.
Find out more →Virtual Finance Director
Part-time finance leadership. Forecasting, cash, funding, pricing strategy and a monthly board meeting.
Find out more →Financial freedom & exit
Build a more valuable business, plan your exit and protect your family if the unexpected happens.
See packages →Josef, founder of Blueski, has a soft spot for shopfitting because he enjoyed working as a Company Accountant in shopfitting firms and as Finance Director in construction and manufacturing. Shopfitting and fit-out is a combination of those two sectors, and very few have that expertise in all three sectors. He knows the importance of the gap between the workshop, the site and the bank balance from the inside.
Questions shopfitters and fit-out companies ask us
Do you work with fit-out companies as well as shopfitters?
Yes. Retail, office, hospitality and commercial fit-out contractors face the same challenges as shopfitters: workshop and site costs, variations, applications for payment, retentions and CIS. The same five finance systems apply, and we tailor the job costing to how your business runs.
Do shopfitters and fit-out companies have to operate CIS?
If you install fixed items on site, such as counters, shelving, partitions or fitted joinery, the contract is usually within CIS. Supply-only and off-site manufacture with delivery only are usually outside. It depends on the contract, not the job title, so we review how your contracts are written.
What is WIP and why does it matter?
Work in progress is the value of work you’ve done but not yet invoiced. Without it, your accounts show losses early in a job and big profits when invoices catch up. With it, you see the true margin each month and whether you, or your customer, is funding the job.
We already use Xero, QuickBooks, or Sage. Do we need new software?
Usually not. The problem is rarely the software. It’s how it’s set up. We restructure your chart of accounts and set up job tracking, so all income and costs land on the right job. We are used to working with bespoke software as well.
Will you replace our bookkeeper?
Not unless you want us to. If you have good people, we work alongside them, fill the skill gaps and give them better systems.
How quickly will we see a difference?
We start with a road map and a review of where you are now, then set milestones. Most clients see clearer job and cash reporting within the first few months.
Run your jobs. Don’t let your jobs run you.
Find out before it costs you.
Book a free 30-minute call with Josef. No charge, no obligation. Or download our free e-book, The Five Finance Systems Every Shopfitter Needs.
T: 01664 774041 · M: 07887 921705 · E: Sales@MrBlueski.co.uk
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