As a freelancer, you know that assignments sometimes come in waves and then slow down again. You work through your own limited company (BV), you pay yourself a salary, and perhaps also dividends. That requires a well organised cash flow system that allows you to meet both your business and personal financial commitments smoothly. In this article, we’ll take you step by step through how to prepare for future costs and taxes, decide on the right reserves to keep, and determine when it’s appropriate to pay out dividends — all with one goal: peace of mind in your financial planning.
Knowing what’s coming gives you peace of mind. When your work fluctuates, create at leasttwo financial scenarios: an optimistic one (plenty of work) and a conservative one (fewerassignments). For your BV, this forms the foundation of your cash flow planning. Your forecast should include:
- Your expected turnover per month or quarter.
- Your fixed business costs (office rent, subscriptions, software, insurance).
- Your variable costs (project expenses, materials, external contractors).
- The salary you intend to pay yourself (or the minimum you want to receive).
- Tax and premium obligations on the horizon (corporation tax, dividend tax, VAT, payrolltax).
By understanding where you’re heading in advance, you can avoid being caught short in quieter periods.
When your workload varies, a financial buffer is essential. Below are several important reserves to maintain — both in your BV and personally.
Business buffer in your BV: Keep at least three months of fixed costs as a buffer. Think office rent, subscriptions, insurance — costs that continue regardless of your assignment flow.
Tax and levy reserve: Regularly set aside a portion of your profit for payroll tax, corporation tax, and any potential dividend tax.
Personal buffer: Make sure your personal account covers at least three to six months of living expenses. This prevents financial stress in quieter business months and helps you maintain stability both professionally and personally.
Working through a BV offers flexibility — but also responsibility. As a director‑major shareholder, you must pay yourself a ‘customary salary’. Beyond that, you can pay dividends once your BV’s financial position allows it.
Step 1: Determine your salary — Start by identifying what you need to live comfortably.In consultation with your accountant, calculate the gross salary that meets that requirement, including pension contributions and social insurance.
Step 2: Paying dividends— Only possible if your BV has sufficient profit and liquidity, your buffers are in place, and there are no major obligations in the near future. Many entrepreneurs choose to distribute no more than 50% of profit as dividends annually, keeping the company financially sound. How much you pay also depends on your costs‑to‑income ratio and whether you actually need the funds for personal use —otherwise, it’s often more tax‑efficient to retain profits within the business.
One of the biggest pitfalls for freelancers with irregular work is forgetting future expenses:holidays, software renewals, maintenance, tax changes, or late‑paying clients. Plan for these items early in your forecast.Build up extra reserves during busy periods so quieter months don’t become stressful. Also discuss with your advisor when it’s best to pay dividends or build additional reserves — the right timing can make a significant difference to your cash flow and peace of mind.
Review this checklist monthly or quarterly:
- Have I checked my current cash position?
- Are there assignments or invoices delayed?
- Are my fixed costs still appropriate?
- Have I set aside funds for upcoming taxes?
- Do I have enough buffer in both BV and personal accounts?
- Is my salary still aligned with my personal expenses?
- Can I responsibly distribute dividends?
For freelancers operating through a BV with fluctuating income, the key is to plan ahead.With solid forecasting, sufficient reserves, and clear agreements about salary and dividends, you’ll stay in control of your cash flow. This gives you the confidence to focus on your business, even when work temporarily slows down.
At Suijkerbuijk+Co, we help entrepreneurs gain structure and peace of mind in their finances. By combining smart automation with personal advice, we make sure you spend less time worrying about money — and more time doing what you’re best at: running your business.
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