The agency’s guide to improving cash flow

Managing cash flow can feel like a constant juggling act for agency leaders. In a tricky economic climate, having a positive cash flow forecast is a surefire way of ensuring your agency thrives, not just survives. In 2025, agencies will need to adopt smarter strategies to ensure cash flow stability while staying competitive. So here’s a complete guide to improving cash flow in 2025 and beyond. 

This guide will cover:

• Auditing your retainers
• Leveraging AI to maximise productivity
• Offering your clients more using your Nimbus hosting package
• Managing your cash inflow with smarter payment terms
• Cash flow training for your team
• Scaling wisely
• Building a financial cushion

But first, let’s explore why a healthy cash flow matters now more than ever.

Cash flow is the lifeblood of your agency. It’s the money that flows in and out of your agency and is vital to success. Without cash flow, there is no profit. Running an agency isn’t just about staying afloat; it’s about being agile enough to seize opportunities when they arise. A strong cash flow means:

• Investing in growth – Whether it’s onboarding new clients or expanding your services, cash flow gives you the confidence to invest.
• Paying teams on time – Happy, motivated staff are the backbone of your agency.
• Weathering market shifts – With a healthy financial buffer, your agency can adapt quickly to changing client demands or unexpected costs.

Financial planning is key to an agency’s success, so here are 7 tips to improve cash flow and make financial planning simple in 2025.

Retainers remain one of the most reliable ways to stabilise agency revenue. In 2025, reevaluate your current retainers to ensure they reflect the value you deliver. For more accurate cash flow forecasting, check out our eight essential steps to building agency retainers guide.

A technique that can be really helpful when auditing retainers is the “up or out” Boston Matrix. It helps determine how profitable each client can be for your agency, how you can change retainers to increase profitability or move clients on when the time is right if there isn’t a way of making things more profitable. 

Unlock the key to your agency’s retainers with our retainer report or learn how to build the ultimate retainer with our handy guide.

Accurate and timely management reporting is essential for maintaining healthy cash flow. These reports provide a clear picture of your agency’s financial health, helping you make informed decisions to optimise operations and plan for the future. Regular management reports should include:

• Cash flow statements – Show the movement of cash in and out of the agency, highlighting areas of concern or opportunity.
• Aged receivables – Identify overdue invoices and pinpoint clients who consistently delay payments.
• Profitability by client/project – Understand which clients or projects contribute the most (or least) to your bottom line.
• Forecast future cash flow – Use historical data and current financial trends to predict future cash flow. This allows you to plan for potential shortfalls and allocate resources effectively.
• Monitor budget vs. actual performance – Compare projected budgets to actual results to identify variances. If projects are consistently running over budget, address inefficiencies to protect profitability.

By integrating detailed management reporting into your financial practices, your agency gains the insights needed to maintain stability, identify growth opportunities, and make smarter decisions that positively impact cash flow.

AI is more than a buzzword – AI can transform your agency and help it run leaner and deliver faster. Use AI to:

• Automate routine tasks – Tools like ChatGPT can draft email templates, blog posts, and social media content, giving your team more time for strategy.
• Optimise resource allocation – Predictive analytics can help you understand where to focus your efforts for the highest returns.
• Improve client reporting – Automated dashboards provide real-time insights, helping you wow clients without the manual work.

By integrating AI into your future marketing strategies, you can cut costs and improve profitability without sacrificing quality.

If you’re already taking advantage of a Nimbus hosting plan, you may already know about reseller hosting. Reselling your hosting to your clients can provide:

• Additional income – increase your profits for each retainer without too much added work by providing hosting services for your client’s websites.
• Increased ROI – Generate positive cash flow and a profit on services you’re already paying for.
• Server-level access – Keep your client’s websites safe, secure and up-to-date easily.

Not on a Nimbus hosting plan yet? Book a tour of our platform to see how we help agencies save while offering premium service.

Creating an accurate monthly cash flow forecast can be a challenge when constantly chasing overdue payments from clients. Tighten up your invoicing process by:

• Setting shorter payment terms – Instead of net-30 or net-60, move to net-15.
• Offering early payment discounts – Incentivise clients to pay sooner. Reserve this for tricker clients who confuse monthly or quarterly payments with yearly payment terms! This can help when your cash position changes and the agency is experiencing some cash flow issues too.
• Using automated payment reminders – Tools like QuickBooks and Xero make it easy to follow up on overdue invoices without the awkwardness.

Some clients may still offer unfavourable payment terms. Agreeing payment terms up front and being strategic really helps. For example, if it’s a Net Monthly Account, invoice it on the last day of the month. If they want Net 60/90, try to shorten the time frame to ensure steady payment.

Train your team to identify cash flow problems and address them proactively. Empowering your team with this knowledge not only improves financial oversight but also strengthens overall business operations.

• Provide more insight – The more team members trained in effective cash flow management, the better equipped your agency will be to monitor and optimise the financial health of the business. Team members can spot patterns, flag irregularities, and contribute to more accurate forecasting.
• Enhance the sales process – With a deeper understanding of the agency’s financial picture, your team can identify opportunities to upsell or cross-sell services. For example, they might propose retainers or project add-ons to existing clients to improve profitability and secure more predictable revenue streams.
• Strengthen internal collaboration – A well-trained team can collaborate better across departments. For example, finance and project managers can work together to align budgets with deliverables, ensuring projects remain profitable from start to finish.

By involving your team in cash flow management and making them commercially aware, you’ll foster a culture of accountability and financial awareness that benefits the entire agency in the long run.

To safeguard your cash flow, consider implementing strategies and tools that guarantee income and reduce risk.  

If late payments are disrupting your cash flow, invoice factoring, discounting or financing can help. These services allow you to receive most of the invoice value upfront (typically 80-90%) from a third party, who then collects payment from your client. This ensures you have immediate cash to cover expenses without waiting for invoices to clear.  

Insuring against bad debt – Protect your agency from clients who might default on payments by investing in trade credit insurance. This insurance provides coverage against losses resulting from unpaid invoices, giving you peace of mind and a financial safety net.  

Late Payment Fees and Incentives  

• Enforce late payment penalties – Clearly state in your contracts that overdue invoices will incur fees. This encourages timely payments.  
• Offer early payment discounts – Incentivise clients to pay ahead of schedule by offering a small percentage off their invoice for early settlement.  
• Escrow services for larger projects –  For high-value projects, consider using an escrow service. Funds are held by a neutral third party and released only when milestones or the full project are completed, ensuring payment security for both parties.  

By incorporating these payment security measures, your agency can maintain a steady cash flow while reducing the risks of late payments or unpaid invoices.

Managing rapid agency growth without losing quality is a fine balancing act. While growth is exciting, it needs to be sustainable. Avoid overextending your resources by:

• Tracking utilisation rates – Understand how your team’s time is spent and identify opportunities for time-optimisation.
• Hiring strategically – Use freelancers or contractors to scale up for short-term projects instead of committing to full-time hires too quickly.
• Focusing on profitable niches – Double down on industries or services that deliver the highest margins.

Scaling an agency can be a rewarding time for everyone. While new clients are flooding in, keep your team informed and your finances up to date and the growing pains will be minimal.

Finally, ensure you’re setting aside a portion of your profits to build a reserve. This cushion can help you weather the slower seasons, invest in new technology, or navigate unexpected expenses.

• Automate savings – Set up a percentage of each payment to go directly into a savings account.
• Plan expenses – Planned expense payments calculate the amount of money from each retainer used for things like rent, salaries and software costs.
• Diversify revenue streams – Explore offering workshops, white-label services, or premium consulting to add to your income.
• Use overdrafts wisely – Having an overdraft is a great way to get out of trouble, but should be used sparingly and responsibly.

Improving cash flow doesn’t have to mean cutting corners or stalling growth. In fact, getting a handle on your finances can mean the opposite. With the right strategies, you can create a financially resilient agency ready to tackle whatever 2025 brings.

Looking for a hosting partner who understands the needs of agencies? Let’s talk. Our platform combines reliability, security, and affordability – perfect for agencies focused on the bottom line.