How much cash should a marketing agency keep?

An agency pays its people twice a month and bills clients on 30 to 60 day terms. That gap is the agency's cash problem. A new client makes it bigger before it makes it better, because you staff up before the first invoice is paid.

Payroll per run, all-in $ How often you run payroll Fixed bills per month (rent, loans, insurance, software) $ Days your customers take to pay, on average days Cash in the bank today $

Minimum to keep

Two payroll runs plus one month of fixed bills

Comfortable level

Covers costs while you wait for customers to pay, plus one month

Weeks your cash covers

If no customer paid you

The starting numbers are an example. Replace them with yours.

How cash moves in a marketing agency

Payroll is most of the cost, and it goes out before clients pay.
Ad spend passed through for clients can swing cash by large amounts.
Project work bills in milestones. Retainers bill monthly.
Losing one large retainer can remove a big share of revenue on a month's notice.

Why the usual rule falls short

Two agencies each bill $90,000 a month. One bills retainers at the start of the month. The other bills at month end on 45-day terms. The second carries about two months of payroll for its clients.

How the calculator works

Result	Formula
Minimum to keep	2 × payroll per run + 1 month of fixed bills
Comfortable level	Monthly costs × (days to collect ÷ 30 + 1)
Weeks your cash covers	Cash ÷ weekly costs

How much cash should your agency keep?

Your forecast shows your lowest cash in the next 12 months. We email you when it heads below your safety level.

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Also for agency owners, see the marketing agency monthly financial report.