Cash flow forecasting for professional services
Agencies, consultancies, engineering shops and IT firms. The work is done, the invoice goes out at month end, and the client pays six weeks after that. Arclite shows the gap thirteen weeks ahead and collects what is sitting in it.
You deliver in January and get paid in March.
Salaries, contractors and software renew on a fixed calendar. Your billing runs at month end, their approval takes a week or two, and only then does net 45 start counting. Between the work and the money there are two months you fund out of your own account.
Winning more work makes the gap wider before it makes it smaller.
An engagement is staffed before it is billed. You hire or you subcontract, you carry the cost through the first cycle, and the first invoice does not clear until the quarter is half gone. The best quarter you have ever sold is often the tightest one you have ever run.
- Unbilled work is not cashHours sitting in work in progress look like revenue on the pipeline and do nothing for Friday.
- Approval comes before the clockNet 45 does not start when you send the invoice. It starts when somebody on their side signs off on it.
- ConcentrationTwo or three clients are most of the book. One of them going quiet is not a slow month, it is a short one.
It all runs off one 13-week cash flow forecast built from the invoices and bills already in your ledger.
Built around a month-end billing cycle.
- Clients timed to their own historyEvery open invoice lands on the week that client has actually paid you, not the week the term expires.
- Retainers and projects, side by sideRecurring fees are steady. Milestones are lumpy. Both sit on the same calendar so you can see which is carrying you.
- People costs stay fixedSalaries, subcontractor invoices and software renewals go in as the fixed outflows they are.
- The cost of a new engagementSee the week staffing a new account starts taking cash out and the week it starts putting cash back.
- Approved invoices, chasedSigned off, sent, and still nothing. Arclite ranks them by what they do to your tightest week and drafts the follow-up.
- Nothing sends without youEvery reminder waits for your approval, and so does anything Arclite posts back to QuickBooks Online.
Part of the gap is money you have already earned. Arclite ranks and drafts the follow-ups so you can chase invoices a client has already approved without building the list by hand.
Live before the next billing run.
1. Connect QuickBooks Online
One connection. About five minutes, no data entry.
2. Arclite reads the ledger
Open invoices, bills, balances, and how every client has actually paid you.
3. Thirteen weeks appear
Week by week, with the tight week marked and the invoices behind it named.
4. Run the month off it
Chase what is approved and unpaid. Time the bills that can wait until after the billing run lands.
The hire you cannot see the cost of.
People are the only real lever in a services business and the slowest one to reverse. A salary starts the week they do. The work you hired them for bills eight to twelve weeks later, if the client signs on time.
Put the hire in the weeks before you sign the offer.
One person at a loaded cost is a number you already know. What is not obvious is which week it turns your forecast over, and whether the work you hired them for pays before or after that week. Thirteen weeks answers both in about a minute.
- Weeks of runwayOne number for how long you can carry the current team at the current pace with nothing new closing.
- Collect firstSome of the gap is money you have already earned, sitting in invoices nobody followed up on.
- Ask before you commitBeans answers from your own ledger. Can I carry a second engineer if the Q4 renewal slips a month.
Professional services firms average 43.3 days to get paid, and architecture and engineering runs closer to sixty. We publish how late professional services clients pay, so you can check your own receivables against it.
Questions from firm owners.
Yes. Arclite times every invoice you have actually raised to how that client has paid you before. Work you have delivered and not yet billed does not appear as cash, because it is not cash yet. What you get is the money that has been invoiced and the money that is going out, on the weeks they land rather than the month they belong to.
It does not need a special mode for it. A retainer is the same invoice arriving on the same week every month, so it models as steady. Project milestones arrive when they arrive. On the thirteen weeks you can see which part of your cash is the recurring base and which part depends on a milestone getting signed by somebody who is on holiday.
It is the opposite. Payroll is the most predictable thing in a services business, and predictable outflows are what make a forecast worth reading. You tell Arclite the day money leaves and what it costs, and the rest gets timed around it. You can push a software renewal and you can call a subcontractor. You cannot push payroll, so Arclite never models it as if you could.
It is already in the numbers. Every client's profile is built from when they have actually paid you, and approval lag is part of what that measures. The client whose finance team takes two weeks to sign off before net 45 begins is modeled at closer to sixty days, because sixty days is what they do.
No. Arclite integrates directly with QuickBooks Online and reads from it. It does not track time, manage projects, or plan resourcing, and it will not replace the system you run delivery on. It does the one thing those tools do badly: thirteen weeks of real cash, built from your actual invoices and bills, plus the follow-ups that change it.
See the gap before the billing run does.
Connect QuickBooks Online and Arclite builds thirteen weeks from your open invoices and your payroll. Nothing to import, nothing to maintain.
$50/month. 7-day trial. Cancel in one click.
$50 a month, 7-day trialsee it work in four minutes
Advisor? Book a partnership call