{
  "slug": "agency-runway-months",
  "title": "Services Business Cash Runway Calculator",
  "heading": "Agency Cash Runway Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/agency-runway-months",
  "summary": "Account for unpaid invoices and payment terms to get a real runway number.",
  "description": "Runway for a services business isn't just cash divided by burn, because a large slice of your near-term money is sitting in receivables that clients will pay on their own schedule. This calculator adds collectible receivables — discounted for your realistic collection rate — to cash on hand, subtracts payables due, then divides by net monthly burn to give a runway figure that survives contact with reality. It also shows the runway you'd have on cash alone, so you can see exactly how much of your survival depends on clients paying on time. Agencies on net-60 terms routinely find their honest runway is two months shorter than their bank balance implies.",
  "formula": "Effective cash = cash + (receivables × collection rate) − payables. Net burn = monthly cost − monthly collected revenue. Runway = effective cash ÷ net burn.",
  "dateModified": "2026-08-25",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=agency-runway-months",
  "inputs": [
    {
      "id": "cash",
      "label": "Cash on hand",
      "kind": "number",
      "hint": null,
      "default": 150000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "ar",
      "label": "Accounts receivable",
      "kind": "number",
      "hint": null,
      "default": 210000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "collect",
      "label": "Realistic collection rate",
      "kind": "number",
      "hint": null,
      "default": 94,
      "unit": "%",
      "min": 0,
      "max": 100
    },
    {
      "id": "ap",
      "label": "Accounts payable due",
      "kind": "number",
      "hint": null,
      "default": 46000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "cost",
      "label": "Monthly operating cost",
      "kind": "number",
      "hint": null,
      "default": 98000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "revenue",
      "label": "Monthly collected revenue",
      "kind": "number",
      "hint": null,
      "default": 86000,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "runway",
      "label": "Runway including receivables",
      "format": "decimal",
      "hint": null,
      "primary": true
    },
    {
      "id": "cashRunway",
      "label": "Runway on cash alone",
      "format": "decimal",
      "hint": null,
      "primary": false
    },
    {
      "id": "effective",
      "label": "Effective available cash",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "burn",
      "label": "Net monthly burn",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "arValue",
      "label": "Collectible receivables",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Cash on hand: 150000 $",
      "Accounts receivable: 210000 $",
      "Realistic collection rate: 94 %",
      "Accounts payable due: 46000 $",
      "Monthly operating cost: 98000 $",
      "Monthly collected revenue: 86000 $"
    ],
    "outputs": [
      "Runway including receivables: 25.1",
      "Runway on cash alone: 8.7",
      "Effective available cash: $301,400.00",
      "Net monthly burn: $12,000.00",
      "Collectible receivables: $197,400.00"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter cash on hand ($).",
      "Enter accounts receivable ($).",
      "Enter realistic collection rate (%).",
      "Enter accounts payable due ($).",
      "Enter monthly operating cost ($).",
      "Enter monthly collected revenue ($).",
      "Read your runway including receivables on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "cash": 90000,
        "ar": 125000,
        "collect": 56,
        "ap": 28000,
        "cost": 59000,
        "revenue": 52000
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "cash": 150000,
        "ar": 210000,
        "collect": 94,
        "ap": 46000,
        "cost": 98000,
        "revenue": 86000
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "cash": 240000,
        "ar": 335000,
        "collect": 100,
        "ap": 74000,
        "cost": 157000,
        "revenue": 138000
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Should I really count receivables as runway?",
      "a": "Count them, but discount them — by your historical collection rate and, if you're being careful, by ageing bucket. Invoices over 90 days old collect at materially lower rates than current ones, so a single blended rate flatters an old ledger."
    },
    {
      "q": "What runway should a services business hold?",
      "a": "Three months is the common minimum, six is comfortable, and anything under two months makes you a price-taker in every renewal negotiation because you can't afford to walk away."
    },
    {
      "q": "How do I extend runway fastest?",
      "a": "Collections beat cost cuts on speed. Chasing overdue invoices, moving new contracts to 50% upfront, and switching to milestone billing can pull weeks of cash forward in days, whereas headcount reductions take a notice period to show up."
    },
    {
      "q": "Why does runway show 999?",
      "a": "Because your collected revenue already covers operating cost, so there is no burn to divide into. You're cash-flow positive at the numbers entered."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/agency-client-concentration",
    "https://www.revenuelab.fyi/toolbox/agency-dso-impact",
    "https://www.revenuelab.fyi/toolbox/agency-capacity-plan"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Services Business Cash Runway Calculator (https://www.revenuelab.fyi/toolbox/agency-runway-months)"
}