If you are concerned about your agency’s health, ensure all non-business critical activities are reviewed and paused if possible. Put a task force in place to oversee these decisions in a timely manner. 

Cashflow requires key management and should be prioritised. The leadership team needs to regularly review and act accordingly, however, just reviewing cashflow alone is not sufficient.

If the forecast suggests insufficient funds and you are unable to procure short or long term funding, decisions need to be made to minimise outgoings. You should have exhausted all options to avoid running out of cash such as reaching out to clients and renegotiating favourable payment terms, pausing supplier contracts, loan repayment holidays and temporary pay cuts for senior staff. 

If these are not enough, you may have to look at your workforce in line with your revenue and ensure you right-size your team. 

Ask yourselves if you have adequate processes in place to make sure your business is managed efficiently and responsibly. Are budget holders held to account and are business cases provided for large overspends?

Consider being transparent with your team so they understand the business situation and avoid jumping to conclusions due to lack of communication. A pay freeze can signal dire straits, when it might just be a short-term preventative measure. It’s also worth highlighting/ leveraging the non-financial benefits that are available to employees. 

If your forecast suggests this is a short-term blip, you could explore other methods of retaining staff such as offering unpaid sabbaticals otherwise you could have to face the additional expenditure associated with recruitment when things improve. If revenue forecasts do indicate fees will remain low for the foreseeable future, make sure you are taking corrective action sooner rather than later to avoid having a disproportionate overhead to your revenue for longer than necessary.