Model the months with low collections and unavoidable cash expenses. Update the assumptions with your own seasonal records.
Try this with your own numbersFormula and worked example
Reserve = months × max(0, fixed costs − cash contribution) + buffer
| Input | Example |
|---|---|
| Low-season months | 3 |
| Monthly fixed cash costs | 8,000 |
| Monthly cash contribution in low season | 5,000 |
| Extra contingency cash | 3,000 |
| Calculated result | 12,000 |
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.
How should seasonal reserves be estimated?
Model the months with low collections and unavoidable cash expenses. Update the assumptions with your own seasonal records.
Assumes the same monthly shortfall; use cash contribution rather than invoice profit.
What if this input changes?
If low-season months rises by 10%, this example changes by 900 . 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.