Cashflow is the silent killer of creative agencies.
You can be fully booked, with a team running at capacity—and still be worried about paying next month’s wages.
If that sounds familiar, you’re not alone. Many creative agencies struggle with cashflow, even when business is technically “going well”. In this article, we’ll unpack the most common reasons agencies face cashflow problems, and walk you through practical fixes you can start using today.
Why Cashflow Problems Happen in Creative Agencies
Creative agencies aren’t like typical businesses. You sell time, not products. You take on big projects, with payment often spread over months—or delayed entirely. Here’s where things tend to go wrong:
1. Slow Client Payments
The biggest culprit? Late invoices.
Even with 30-day payment terms, many clients stretch payments to 60 or even 90 days. According to a 2023 survey by Freelance Heroes, over 60% of agency owners said they’ve had to chase invoices more than once a month.
The impact: You’re paying salaries, rent, and software licences upfront—while waiting weeks (or months) to get paid for work already delivered.
2. Unpredictable Project Work
Many creative agencies rely on large, project-based contracts. While a new project can bring in a chunk of revenue, it’s also a cashflow risk. Delays in sign-off, scope creep, or postponed start dates all affect when (or if) you’ll be paid.
Feast and famine cycles are common—and dangerous. One good month followed by two dry ones can destroy your runway.
3. Poor Financial Forecasting
Most agencies don’t have a clear picture of future cashflow. If you don’t know what’s coming in (and going out) over the next 30, 60 or 90 days, you’re flying blind.
This lack of visibility makes it hard to plan, hire, or invest in growth. It also leads to panic decisions—like cutting freelance support mid-project or pulling marketing spend just when you need it most.
How to Fix Agency Cashflow: 5 Practical Steps
Cashflow management isn’t sexy. But it can be the difference between burnout and breathing room. Here are five tactics that work.
1. Get Ruthless About Payment Terms
Don’t accept 60-day payment terms as standard. Push back on contracts that hurt your cashflow.
Try this:
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Add a clause for 50% upfront, 50% on delivery
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Introduce milestone-based billing (especially on long projects)
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Use automated reminders to chase invoices as soon as they’re due
“We started billing in three stages: start, mid-point, and final delivery. That shift alone improved our cashflow by 40%.”
2. Use a Cashflow Forecasting Tool
Spreadsheets are great, but tools like Float plug into your accounting software and give you real-time visibility on what’s coming up.
Build a simple 90-day forecast:
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List all expected income by week
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Track all fixed and variable expenses
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Update it weekly (or fortnightly) so it reflects reality
This lets you spot issues before they hit—and make smarter decisions early.
3. Build a Cash Buffer
Set a goal to build 3 months of operating expenses in reserve. This is your “calm money”…..it cushions the blow when a client pays late or a project stalls.
How to start:
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Funnel 10% of each invoice into a savings account
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Automate the transfer so it’s not negotiable
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Use it only for emergencies, not a new MacBook
4. Smooth Out Your Sales Pipeline
The best fix for cashflow? Predictable revenue.
Consider adding retainer-based services or monthly packages to your offering. These bring regular income and reduce the risk of dry months.
Even better: combine project work with ongoing optimisation, strategy, or support services.
“We used to chase one-off branding projects. Now 60% of our income is from retainers. Cashflow is boring—and that’s a good thing.”
5. Review Your Pricing and Margins
Sometimes, cashflow problems aren’t about timing—they’re about undercharging.
Make sure your rates reflect the true cost of delivering the work, including:
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Your team’s time (billable and non-billable)
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Project management overhead
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Tools, software, and admin
Measure each of these areas every month, as part of your Management Accounts process
Final Thoughts: Don’t Let Cashflow Kill Your Agency
Agency cashflow problems are common, but they’re not inevitable.
With a few tactical changes, you can take control of your finances, reduce stress, and give your agency room to grow.
Start by looking at where the money’s getting stuck—and build systems that keep it moving.
Want Help Fixing Your Cashflow?
We help creative agencies build smarter financial systems—from forecasting to pricing strategy. Book a free discovery call and let’s chat.