Ask an agency founder how the next quarter looks and you will often hear one number. It usually blends signed work, work that is nearly signed, invoices already out and money in the bank. Each of those is real. Added together, they describe nothing.
This guide separates the numbers that sit between a sale and cash, explains why they drift apart, and sets out what a cash-flow forecast needs on top of them.
What are the numbers between a sale and cash?
There are four stages, and each one is less certain than the next:
| Number | What it is | Where it usually lives | How certain |
|---|---|---|---|
| Pipeline | Deals you hope to win, often weighted by probability | CRM | Least certain |
| Planned billables | Invoices you have agreed to raise on future dates, for signed work | Spreadsheet, project tool or billing schedule | Committed, but dates move |
| Invoiced (accounts receivable) | Invoices issued and not yet paid | Accounting system | Owed, not yet received |
| Collected | Cash in the bank | Bank feed and accounting system | Certain |
The sales pipeline is the subject of a separate guide. This guide concentrates on the three numbers after the deal is won.
What is a planned billable?
A project billable is a promise to ask a client for money on a date. A £60,000 website project might have four planned billables: a deposit on signing, one at design sign-off, one at launch and a final one after the warranty period.
Planned billables are the most neglected of the three. They often sit in a proposal PDF or someone’s head. If a milestone slips, the invoice slips with it, and nobody notices until the month’s billing looks thin.
What is accounts receivable?
Accounts receivable is the total of invoices you have issued and not yet been paid for. It lives in your accounting system and is the most precise of the three, because an invoice either exists or it does not.
Receivables become a problem when they age. An invoice 60 days overdue is worth less, in practice, than one issued yesterday. That is why finance teams look at an aged debt report rather than a single total, and why a steady credit control routine matters (see late payment and credit control).
Why does merging the numbers mislead?
Merging them hides where the money is stuck. Each gap between the numbers has a different cause and a different owner.
- Planned but not invoiced means a milestone slipped, nobody raised the invoice, or the work is waiting on the client. The owner is the project or account lead.
- Invoiced but not collected means the client has not paid. The owner is whoever runs credit control.
- Pipeline counted as planned means the forecast includes work nobody has signed. The owner is sales.
A worked example, with invented figures. Take a 30-person agency reviewing next month. It has £180,000 of weighted pipeline, £95,000 of planned billables due to be invoiced, £70,000 of receivables outstanding, of which £25,000 is overdue, and £40,000 in the bank.
A merged view might say “about £385,000 coming”. The separated view says something more useful:
- Only £95,000 of new invoices is actually scheduled. The pipeline is hope until it is signed.
- £25,000 is already overdue and needs chasing this week.
- Two of the planned billables, worth £30,000, depend on the client signing off designs. If that slips a fortnight, the invoices slip too.
The first view leads to hiring. The second leads to three specific conversations.
What does a real cash-flow forecast need?
A cash-flow forecast needs everything going out as well as everything coming in, with dates. The three revenue numbers only cover part of the inflow.
A usable forecast for a service firm also includes:
- Payroll, usually the largest outgoing, plus employer National Insurance and pension contributions.
- Tax: VAT returns, PAYE, and corporation tax, each on its own schedule.
- Supplier costs: freelancers, software subscriptions, hosting, rent.
- Timing: the realistic date each invoice will be paid, based on each client’s actual payment behaviour, not their terms.
- One-off items: loan repayments, equipment, dividends.
- An opening bank balance, reconciled.
Most accounting packages, Xero included, offer a short-term cash-flow view built from the invoices and bills already entered. That is a good start for the next few weeks. For a longer horizon, most firms add planned billables and known costs in a spreadsheet or a dedicated forecasting tool, and review it with their accountant.
Why do planned billables slip without anyone noticing?
Planned billables slip because nobody owns the date. The account lead assumes finance will raise the invoice, finance waits to be told the milestone is done, and the project manager is busy delivering the next phase. The invoice is not late in any system, because no system knew it was due.
Three habits fix most of this:
- Give every planned billable a date and an owner as soon as the contract is signed, not when the milestone arrives.
- Check each one a week before it falls due. Is the work on track? Does the client need to sign something off first? Is a purchase order in place?
- Record the reason when a date moves. “Client delayed sign-off” and “we forgot” need different fixes, and you only learn which is common if you write it down.
How should you report the three numbers?
Report them side by side, never summed, and always with a date range and an owner for each gap. A simple weekly view might be:
- Planned billables due to be invoiced in the next 30 days, and which are at risk of slipping.
- Invoices raised this week against what was planned.
- Receivables by age: current, 1–30 days overdue, 31–60, over 60.
- Cash collected this week.
If you forecast from pipeline, keep it as a separate line labelled as weighted pipeline, and do not let it into the cash figures.
Where OpsUPLOOP fits, and where it doesn’t
OpsUPLOOP keeps planned billables, issued invoices and collected cash as separate numbers, each with a named owner, so you can see where money is stuck between a signed deal and the bank. Planned billables have dates and health checks, invoices come from your accounting system, and overdue invoices can be chased on a schedule. See OpsUPLOOP Billing for how this links back to the pipeline.
OpsUPLOOP is not a cash-flow forecast. It does not model payroll, VAT, corporation tax or supplier costs, and it does not replace your accounting system or your accountant. Use it to make the revenue side accurate, then feed that into the forecast you already trust.
Other questions
Is accounts receivable an asset?
Yes. On the balance sheet, accounts receivable is a current asset, because it is money owed to you. It is still not cash until the client pays.
Should a signed contract count as invoiced?
No. A signed contract turns pipeline into planned billables. It only becomes invoiced when you issue the invoice, and collected when the money arrives.
How often should an agency review these numbers?
Weekly works for most firms of 10 to 75 people. Look at invoices due to be raised, overdue receivables and cash in the bank side by side, and ask who owns each gap.