Cash flow forecasting for staffing agencies
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | Wk 5 | Wk 6 | Wk 7 | Wk 8 | |
|---|---|---|---|---|---|---|---|---|
| Cash in | 58 | 54 | 52 | 50 | 49 | 98 | 96 | 97 |
| Cash out | (83) | (82) | (83) | (75) | (72) | (83) | (80) | (80) |
| Ending cash | 180 | 152 | 121 | 96 | 73 | 88 | 104 | 121 |
| Minimum to keep | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| New 40-person contract: payroll grows in week 1, the first invoices are paid in week 6. Short $27k in week 5. | ||||||||
New 40-person contract: payroll grows in week 1, the first invoices are paid in week 6. Short $27k in week 5.
Sample forecast for a fictional staffing agency, in thousands of dollars. Opening cash: 205.
You pay your people every week. Your clients pay you in 30, 45 or 60 days. Every new contract makes that gap wider before it makes you money, and the forecast shows exactly which weeks will feel it.
Where cash gets tight
Payroll before payment. Workers are paid weekly, including payroll taxes, while invoices sit in receivables for one to two months. Growth uses cash before it produces it.
New contracts. A large new placement can be the best news of the year and still create the tightest month, because payroll starts immediately.
Slow-paying clients. One client stretching from 30 to 60 days can move your low point by several weeks.
What the forecast shows
- Weekly payroll and payroll taxes on their real dates
- Collections by client, based on how each one actually pays
- The cash effect of a new contract before you sign it
- When a draw on your line of credit or factoring facility would be needed, and how much
Every forecast is checked before delivery: opening cash ties to your bank balances, receivables and payables tie to your books, and every dollar lands in exactly one week. See services and pricing.
Questions
Can a forecast help before I take on a big new contract?
Yes. We can model the contract's payroll and billing terms in advance, so you see the low point and its timing before you commit.
We use invoice factoring. Does the forecast include it?
Yes. Factoring advances, fees and reserves can be included as their own lines so you see the true cash picture.
Which tier fits a staffing agency?
Most staffing agencies fit Standard, because the gap changes every month as placements change. A Single projection works well before a large contract decision.