Most agencies make bad calls because they look at the wrong time window.
- Rolling 12 shows the truth over time.
- Rolling 3 shows if the last quarter is trending up or down.
Use both. Otherwise, you’ll either:
- React too slow (TTM only), or
- Overreact to noise (short-term only).
Credibility comes from clear timeframes and methods. Always state how and when you measured.
What They Are (Simple)
- Rolling 12 (TTM): Last 12 months, updated monthly. Smooths seasonality. Shows the true slope (not just one lucky or bad month).
- Rolling 3 (R3): Last 3 months, updated monthly or weekly. Detects momentum shifts early.
Numbers beat opinions. Use both to increase confidence in your decisions.
What to Review (By Both Windows)
- Revenue and gross margin by service line (recurring, resell, projects)
- Net operating income (after owner pay)
- DSO and cash runway
- Effective rate (revenue ÷ billable hours)
- Churn and retention
Think of this as a weekly checklist. Systems beat gut feel.
How to Use the Signals
- R12 up, R3 down → early slip. Tighten scope, enforce rate cards, pause nonessential spend.
- R12 flat, R3 up → momentum. Raise price floors, greenlight hires (if coverage allows).
- R12 down, R3 up → recovery. Protect cash; don’t over-hire yet.
- R12 down, R3 down → root-cause now. Fix pricing, pipeline, or delivery leaks.
When performance dips, retrain the step that was dropped. Don’t guess — inspect the process and correct it fast.
Cadence (Run This Like an Operating System)
- Weekly: Review R3 for trend changes and pipeline coverage. Assign fixes (pricing, scope, collections).
- Monthly: Update R12 to validate the bigger slope. Adjust hiring and overhead based on reality.
- Always: Label every chart with timeframe and method. Transparency builds trust.
Example Decision Triggers You Can Steal
- If R3 GM < target by 3 pts but R12 is steady → enforce price floors and SOW changes immediately.
- If R3 DSO worsens by 10+ days → move to auto-billing on Day 1; cut manual invoicing.
- If R3 effective rate falls → QA discounts, stop “make-goods,” and reprice low-margin projects.
Implementation (Fast)
- Build R12 and R3 views in your dashboard, segmented by service line.
- Assign an owner-of-record per metric.
- Add a one-line “next action” for accountability.
Bottom line: R12 tells you the truth. R3 tells you if it’s changing. Use both and you’ll hire, price, and spend based on math — not mood.
Call to Action
I’ll install your R12/R3 dashboard, set targets by service line, and run a 90-day cadence so you make better pricing and hiring calls — faster.
We run just two slots per month — book HERE to claim one.
About the Author
Michael Argento, CPA
Founder + Fractional CFO at Argento CPA
Michael helps ambitious Canadian business owners align compensation with performance. From creative agencies and SaaS startups to scaling construction trades businesses, he builds financial systems that reward results — without sacrificing sustainability.