This agency was doing $4.5M in sales — yet the owner was staring at less than two weeks of cash, drawing on a $500k credit line just to survive. Margins were negative, invoices were late, and there was no clear view of the future. Growth had created complexity, but without the right financial systems, that growth was eating them alive.
Before: Where They Started
- Revenue: $4.5M
- Net Margin: –3% (after owner pay)
- Cash: <2 weeks visibility; pulling on a $500k LOC, projected 75% drawn by December
- Days Sales Outstanding (DSO): 30–45 days (manual invoicing)
- Close Time: 21 days to finalize monthly books
- Gross Margin: Undefined (COGS inconsistent, no clean view)
Translation: A business that looked successful on paper but was bleeding profit, burning cash, and running blind.
What We Built (Weeks 1–2)
- Reporting stack: LTM, rolling 12/3, YTD vs. PY, cash balance, BvA, 12-month forecast, statement of cash flows, and 3-year IS.
- Defined gross margin: Reclassified COGS to isolate true gross margin.
- Billing: Switched all clients to auto-billing on the 1st.
Now the owner had real numbers and predictable cash flow.
Plays Implemented (30–60 Days)
- +10% targeted price increase (scripted for high-value accounts).
- 9% escalator built into every new contract.
- –2% overhead reduction through vendor and expense cleanup.
Small, strategic moves that compound quickly.
After (90 Days)
- Net Margin: –3% → 10% (after owner pay)
- DSO: 30–45 days → near-zero (auto-billing)
- Close Time: 21 days → 4 days
- Cash: LOC fully paid down, recovery in motion
Decisions unlocked:
- Floor pricing by client
- Standardized escalators
- Weekly cash reviews + 12-month forecast discipline
ROI Math (Run-Rate)
+13-point margin swing on $4.5M = ~$585k/year improved profit.
Ready to Fix Your Agency Finance?
We run 2 Agency Finance Health Checks per month.
In 45 minutes, you’ll get:
- Benchmark vs. peers
- 90-day cash + margin plan
Book yours HERE.
About the Author
Michael Argento, CPA
Founder + Fractional CFO at Argento CPA
Michael helps ambitious business owners turnaround financial performance. From creative agencies and SaaS startups to scaling construction trades businesses, he builds financial systems that reward results—without sacrificing sustainability.