Published by Adam Cooper, founder of ACC Finance Solutions. Insights drawn from a podcast with Gulliver Moore on The Fractional CFO Show, lightly edited for clarity.
Estimated reading time: 5 minutes
Sunday Treat pays its freelancers within thirty days. Some of its clients take ninety. A few, founder Gulliver Moore admits, have taken close to a year. That gap between paying people out and being paid by clients is the working capital cycle in its rawest form, and for a five-year-old, organically funded creative agency now turning over roughly £2 million, getting it wrong is not an abstract risk. It is the difference between making payroll and not.
The working capital cycle is simply the time it takes for cash spent on delivering work to come back in as cash collected from clients. The longer that cycle runs, the more cash a business needs sitting in reserve to cover the gap. For project-based agencies, where staff and freelancers are paid monthly while clients can take months to settle invoices, this is rarely a once-a-quarter glance at the bank balance. Good cash flow management in business means treating that cycle as something to actively shorten and buffer against, not something to discover the hard way.
Why the Working Capital Cycle Stretches as You Scale
Sunday Treat works with major brands including Google, Revolut, Candy Crush and Canon, deliberately staying sector agnostic rather than niching down. Project sizes have grown from £5,000-£15,000 jobs at the start to £25,000, £50,000 and now regularly over £100,000. Growth like that is good news, but it also stretches the working capital cycle further, since bigger projects mean bigger team and freelancer costs landing well before the matching invoice clears.
This is where agency cash flow becomes a discipline rather than an afterthought. Salaries, freelancer payments and software licences are fixed and immediate. Client payment is not.
The Gap Between What You Pay and What You’re Owed
“We pay our team every month, and we pay freelancers within thirty days or less. Clients can sometimes take ninety days, or if I’m being totally honest, sometimes even up to a year, to pay us.” (Gulliver)
This is not a Sunday Treat problem. QuickBooks’ 2025 UK Small Business Late Payments Report found that 62% of UK small businesses were grappling with unpaid invoices, with those affected owed an average of £21,400 at any one time. For agencies in particular, the mismatch between monthly payroll and unpredictable client payment terms is one of the most common causes of avoidable cash flow management problems. This timing gap represents the difference between profit and cash at bank which can confuse some founders. Our article about accrual accounting goes into more detail if you want to increase your understanding of your numbers.
Building a Buffer Instead of Relying on Funding
Sunday Treat has never taken external investment. Every pound of growth has been self-funded, which makes disciplined cash flow management for agencies a survival skill rather than a nice-to-have.
“Whenever we’re doing financial projections, we always take the conservative route. We always assume the worst is going to happen.” (Gulliver)
That conservatism shows up as a cash cushion sized to cover several months of operating costs, built specifically so the business can absorb a slow-paying client without missing payroll. It is a practical example of the kind of forward-looking forecasting we cover in Cash Flow Management for Agencies: Forecasting, Control, and Confident Decision-Making, and it is precisely the discipline a fractional CFO should be helping you build before a slow quarter forces the conversation.
Growing the Buffer as the Business Grows
The cushion has not stayed static. As project values climbed, so did the buffer behind them, deliberately and in step with the widening working capital cycle. Gulliver has turned down work that felt like too large a jump, preferring steady increments over a leap that could outpace available cash.
Weekly financial check-ins keep this visible. Knowing where the money is going, every week rather than at month end, is what allows a founder to spot a widening gap early enough to act on it rather than react to it. This kind of forward visibility is exactly what we mean when we talk about agencies needing financial visibility as they scale, not just accurate bookkeeping after the fact.
What US Expansion Adds to the Picture
Sunday Treat now operates as an LLC in the US, after roughly 40 percent of its revenue started arriving from American clients organically. The increase came mostly through referrals and introductions from UK clients with US branches, rather than through the outbound lead generation that had driven UK new business. That distinction matters for cash flow. A referral-led pipeline is harder to predict than an outbound one, which means the buffer has to work harder in the US context than it does at home.
The other variable is cost. Hiring freelancers in the US is significantly more expensive than in the UK. Sunday Treat’s response has been to keep pre-production and post-production anchored in its UK office wherever possible, using that cost structure both as a competitive pricing advantage against US agencies and as a way of controlling the outgoing side of the working capital cycle. Widening the gap between what goes out and what comes in is the fastest way to stretch a cash buffer beyond its limits. Keeping UK delivery costs against US project revenues compresses it.
The Lesson on Separating Finance From Client Relationships
Asked about his biggest financial lesson as a founder, Gulliver did not point to a single number. He pointed to timing: bringing in dedicated finance support later than he should have and not giving that person enough independence to manage client payment conversations directly.
“It’s always a tricky thing when you feel like you’re polluting the relationship you’ve put so much work into with a client by chasing them for an invoice.” (Gulliver)
Letting someone else own that conversation, separate from the people managing creative delivery, has made invoice chasing more consistent and less personally fraught. It is a small structural change with an outsized effect on agency cash flow, and one many growing businesses leave too late.
A CFO’s Perspective
At ACC Financial Solutions, this is something we see repeatedly with the agencies we work with. The founder or account lead is reluctant to chase an invoice because they are worried about damaging a relationship they have spent months building. So, the invoice sits. In the meantime, the working capital cycle quietly stretches, the cash position tightens, and the business starts absorbing the cost of someone else’s slow payment. Separating that conversation from the people managing the creative work is one of the simplest structural changes an agency can make. In our experience providing fractional CFO services, it almost always results in faster payment and better client relationships, not worse ones. Clients respect process. What they pick up on is desperation.
What This Means for Your Agency
None of this requires sophisticated software or a finance department. But it does require honesty about where your working capital cycle currently stands. Here are the questions we work through with every agency founder we onboard at ACC Finance Solutions:
- How long does your worst-paying client typically take to settle?
- Does your cash buffer reflect that reality, or the average?
- And when a large project completes, does your reserve grow in step with the risk, or stay flat?
Gulliver’s approach has been to treat conservative forecasting not as pessimism but as protection. The buffer exists so that a slow-paying client becomes an inconvenience rather than a crisis. Most founders learn the value of that distinction after a difficult month. The ones who build it in early spend far less time managing the consequences.
If your own forecasting has not been stress-tested against your worst-paying client, that is exactly where a fractional CFO conversation should start. If you are not sure how your working capital cycle measures up, the ACC Financial Health Check is a good place to start.
Three Books Worth Your Time
Gulliver recommends three books that stand out for anyone stepping into management or trying to protect their time:
- Radical Candor by Kim Scott, on having direct, constructive conversations with a team.
- The Making of a Manager by Julie Zhuo, a recurring reference for anyone moving into a leadership role.
- Uptime by Laura Mae Martin, on protecting time and focus by limiting daily priorities to what genuinely matters.
Frequently asked questions about the working capital cycle
What is the working capital cycle?
The working capital cycle is the time it takes for cash spent delivering work, on salaries, freelancers and overheads, to come back in as cash collected from clients. The longer the cycle, the more cash a business needs in reserve to cover the gap. For agencies with monthly payroll and slow-paying clients, a long working capital cycle is one of the most common causes of avoidable cash flow problems.
Why does the working capital cycle matter more for project-based agencies?
Project-based agencies typically pay staff and freelancers monthly or within thirty days, while client payment terms can stretch to ninety days or longer. As projects grow in size, the working capital cycle widens further, making conservative forecasting and a sufficient cash buffer essential rather than optional.
How much cash buffer should an agency keep?
There is no single figure that suits every business, but a common starting point is enough to cover several months of fixed operating costs, including payroll. The right number should grow in line with average project size and the length of your working capital cycle, which is a calculation a fractional CFO can help model accurately.
Can a project-based agency manage its working capital cycle without external funding?
Yes, but it requires conservative forecasting and a cash buffer that grows in step with the business. Sunday Treat has grown to roughly £2 million turnover without taking any external investment, despite paying freelancers within thirty days while some clients take up to a year to pay. Founder Gulliver Moore attributes this to always assuming the worst in financial projections, never taking on projects that represent too large a jump in scale, and running weekly financial check-ins to keep the gap between outgoings and income visible at all times. Working through those numbers is something ACC can help model before the pressure arrives, rather than after.
