Why Your Agency’s Profits Look Great– But Cash Is Still Tight (And How To Fix It).
You had your best month ever on paper, so why does your bank balance feel like it’s in free fall?
If you’re running a growing agency, you’ve probably been here before.
You’re winning new clients. Revenue’s up. Your accountant says you made a profit. But still… cash is tight.
You’re scrambling to pay salaries. Your VAT bill wiped out your buffer. And you’re left wondering: Where the heck did the money go?
You're not alone. This is one of the most common (and frustrating) pain points we hear from agency owners. And the truth is, it’s not your fault. Most agency finance systems just aren’t built to give you the full picture.
That’s why we created The Finance Playbook for Agencies. It’s a no-nonsense, easy-to-understand resource to help agency founders finally get clarity on profit vs. cash, project profitability, and financial decision-making– without needing an accounting degree.
Let’s break it down.
Profit ≠ Cash (And Why That’s Misleading You).
Your P&L (profit and loss) report tells one story. Your bank account tells another.
And here’s why: Profit is an accounting concept. Cash is your lived reality.
Let’s say your P&L shows a £20k profit for the month. That might feel like a win– but it’s not the whole story.
If £15k of that is tied up in unpaid invoices
And you’ve just paid a £7k VAT bill…
You’re suddenly £2k in the red.
That gap between what you’ve earned and what you’ve actually received can crush even the most successful-looking agencies.
4 Reasons Your Agency’s Bank Balance Doesn’t Match the P&L.
If you’re profitable on paper but stressed about cash, here’s what might be happening under the hood:
1. Unpaid Invoices Are Piling Up.
You’ve done the work. You’ve sent the invoice. But if you’re not getting paid on time– or not tracking who owes what– you’re funding client projects out of your own pocket.
Quick fix: Tighten up your receivables process. Automate invoice reminders. Review your payment terms.
2. VAT and Tax Liabilities Aren’t Accounted For.
That £20k “profit” doesn’t include the £7k you owe HMRC. If you’re not forecasting for tax properly, those quarterly payments will always catch you off guard.
Quick fix: Treat tax like an expense and plan for it monthly in your cash flow model.
3. You’re Invoicing Late.
Many agencies invoice after the work is done. But if you’re not billing upfront or in stages, you’re fronting the cost of delivery– and waiting 30, 60, even 90 days to get paid.
Quick fix: Shift to upfront deposits and milestone billing. It transforms your cash position overnight.
4. Hidden Cash Drains Aren’t Showing Up.
Loan repayments. Equipment purchases. Owner dividends. These don’t show up in your P&L– but they pull cash straight out of your business.
Quick fix: Track these in your short-term cash flow forecast. Knowing what’s coming means no more nasty surprises.
You Don’t Need More Spreadsheets. You Need a System.
When you’re busy running an agency, it’s easy for finance to become an afterthought. But without a system that shows you what’s really going on, you’re always a few weeks behind– making reactive decisions instead of proactive ones.
The good news? You don’t need to be a numbers whiz to get on top of this.
Inside The Finance Playbook for Agencies, we show you:
✓ How to interpret your P&L, balance sheet, and cash flow
✓ How to match costs and revenue to see true profitability
✓ How to forecast cash flow (and never get blindsided by VAT again)
✓ How to use your PM system to track project margins
✓ How to build a simple reporting pack that helps you make smarter decisions every month
Build an Agency That’s Profitable & Predictable.
We’ve worked with agencies across the UK– from solo founders to 30-person teams– and we’ve seen it time and again: when you build a finance system that’s built for clarity, not complexity, you unlock the confidence to scale on your terms.
No more guesswork. No more panic VAT payments. Just smart decisions, strong margins, and a clear plan.
Download the Finance Playbook for Agencies.
It’s totally free and packed with practical tools you can use straight away.
Takes 2 minutes. Instant download. No pressure.
Final Thoughts.
If your agency’s growing, but you still feel like you’re in the dark when it comes to money– you’re not failing. You just need a better system.
Start with the playbook. Then if you want support building out your reporting, forecasting, or project tracking– we’re here.
Your agency’s next stage of growth starts with financial clarity.