How to keep your business financially on track
Agencies and consultancies are facing big challenges planning their cash flow. As those companies rely on projekt business, incoming payments strongly vary depending their order situation. Further, many orders are being paid quite a long time after delivery, whereas outgoing payments have to be made continuously to be able to deliver to the customer.
Many service companies also provide their services with the help of subcontractors or freelancers. The risk is: Often their invoices have to be paid even before the customer pays for the company’s service – which obviously reduces liquidity. Moreover – whereas from the customers perspective project costs are more or less variable – agencies and consultancies face rather high fixed costs paying their high qualified staff and representative branches. Operation in the high quality service sector depends on well-trained and motivated staff and requires representative cost-intensive premises in central locations. In short: Challenges and risks for agencies and consultancies are high on both sides, the in- and the outgoing cash flow.