Yes, when delivery costs are paid before customers settle. More sales can consume more working cash before collections catch up.
Try this with your own numbersFormula and worked example
Funding gap = extra monthly sales × upfront cost × collection delay − allocated cash
| Input | Example |
|---|---|
| Additional monthly sales | 30 |
| Upfront cash cost per sale | 200 |
| Months until collection | 2 |
| Cash allocated to growth | 5,000 |
| Calculated result | 7,000 |
Choose reliable inputs
Account for delivery time, review work and when you expect to be paid for each engagement. For this recruitment agency calculation, use time sheets, engagement scopes and invoice ageing and a consistent definition of one placement.
- Sourcing: include the portion belonging to this placement or reporting period, and record where the value came from.
- Screening: include the portion belonging to this placement or reporting period, and record where the value came from.
- Account management: include the portion belonging to this placement or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Can higher sales increase the cash gap?
Yes, when delivery costs are paid before customers settle. More sales can consume more working cash before collections catch up.
Assumes a steady additional volume and identical costs and delays; capacity investment is excluded.
What if this input changes?
If additional monthly sales rises by 10%, this example changes by 1,200 . This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.