An example of what you receive
From financial commitments
to a clearer decision.
Fictional demonstration. The organization, agreements, and figures are invented to illustrate our approach. They do not represent client results or a promise of performance.
The decision
Should leadership increase a specialist’s minimum guarantee from $10,000 to $14,000 while project revenue and collection timing remain uncertain?
Recommended next step: Retain the current guarantee while confirming the revenue assumptions, collection dates, and measurable benefit of a higher commitment. The proposed increase would turn the downside project contribution from $2,000 into a $2,000 loss before overhead and taxes.
What the agreement means financially
The illustrative agreement pays the greater of a $10,000 guarantee or 20% of eligible project revenue. A $4,000 advance has already been paid. The remaining amount becomes a cash commitment, with settlement assumed in week 2.
| Scenario | Eligible revenue | Total compensation | Still payable | Contribution: current guarantee | Contribution: proposed guarantee |
|---|---|---|---|---|---|
| Downside | $30,000 | $10,000 | $6,000 | $2,000 | ($2,000) |
| Base | $50,000 | $10,000 | $6,000 | $22,000 | $18,000 |
| Upside | $80,000 | $16,000 | $12,000 | $46,000 | $46,000 |
Project contribution subtracts total compensation and $18,000 of other direct project costs. Corporate overhead, taxes, financing costs, and unlisted costs are excluded. The guarantee offsets participation; it is not an additional payment.
What changed in the outlook
The base forecast produces $22,000 of contribution compared with $18,000 in the fictional prior month. Revenue increases by $5,000 and other direct costs by $1,000, while compensation remains $10,000. Leadership should validate the drivers before treating this forecast difference as an operating improvement.
Upcoming payment commitments
| Source | Commitment | Amount | Timing |
|---|---|---|---|
| C-02 | Premises invoice | $2,000 | Week 1 |
| C-01 | Specialist settlement, base forecast | $6,000 | Week 2 |
| C-03 | Operations invoice OPS-101 | $1,200 | Week 3 |
| C-03 | Operations invoice OPS-102 | $1,200 | Week 4 |
| Listed unpaid commitments | $10,400 | October | |
The premises and operations invoices are already included in the $18,000 cost schedule. The register identifies obligations within the forecast; adding it again would double-count costs.
The cash-timing question
| Base case | Opening cash | Receipts | Other costs | Settlement | Ending cash |
|---|---|---|---|---|---|
| Week 1 | $12,000 | $10,000 | $4,500 | $0 | $17,500 |
| Week 2 | $17,500 | $10,000 | $4,500 | $6,000 | $17,000 |
| Week 3 | $17,000 | $15,000 | $4,500 | $0 | $27,500 |
| Week 4 | $27,500 | $15,000 | $4,500 | $0 | $38,000 |
Downside sensitivity: With $30,000 of revenue and the current guarantee, the lowest weekly ending balance is $9,000. Increasing the guarantee to $14,000 brings that balance to $5,000, which is $3,000 below the illustrative $8,000 reserve.
Collection-delay sensitivity: Under the current guarantee, moving a $6,000 receipt from week 2 into week 4 brings week 2 cash to $3,000. Earned revenue is unchanged. Confirm collection dates and funding before authorizing additional commitments.
Exceptions that need attention
Two requests reference the same vendor, invoice OPS-101, currency, and $1,200 amount. Flag both for review against the original invoice and payment history. A separate $1,200 request for OPS-102 remains distinct. Equal amounts alone do not establish duplication, and a flagged request does not establish that an improper payment occurred.
| Action | Owner | Review point |
|---|---|---|
| Verify repeated OPS-101 requests and preserve the separate OPS-102 invoice | Client payment lead | Before release |
| Confirm eligible revenue, advance evidence, and settlement timing | Jacob and client finance lead | Before week 2 |
| Confirm receipts and evaluate funding or mutually agreed timing options | Client decision owner | Before changing commitments |
| Assess the benefit of a higher guarantee and approve any amendment | Client leadership | After updated evidence |
People and accountability
Apply consistent evidence and escalation rules across vendors. Give suppliers a named route to resolve invoice questions, and consider how payment delays affect smaller businesses and service delivery. Changes to agreed payment terms require mutual agreement.
What we learn next month
Compare actual receipts, compensation, and supplier delays with the forecast. Record the decision, who approved it, what happened, and which assumptions need updating. Those lessons improve the next financial outlook.
View the illustrative sources and assumptions
C-01: Compensation equals the greater of the guarantee or 20% of earned project revenue after refunds, excluding sales tax. The $4,000 advance reduces the remaining settlement. The $14,000 alternative is an unapproved proposal. Final eligible revenue is assumed known before week 2 settlement for this simplified example.
C-02 / C-03: The premises invoice and two separate operations invoices are included in other direct costs. No listed invoice has been paid in this example.
Management assumptions: Opening unrestricted cash is $12,000 after the advance. Other costs are $4,500 each week. Baseline receipts equal eligible revenue within October: downside $6,000 / $6,000 / $9,000 / $9,000; base $10,000 / $10,000 / $15,000 / $15,000; upside $16,000 / $16,000 / $24,000 / $24,000.
Prior month: Revenue $45,000, compensation $10,000, and other direct costs $17,000.
Scope: This four-week project illustration excludes other opening receivables, payables, debt, capital expenditure, taxes, owner draws, and unlisted cash flows. Weekly ending balances can hide shortages within a week. A live Growth engagement uses an agreed 13-week outlook and client-validated assumptions.
Jacob reviews client deliverables and leads recommendations. The client retains authority for decisions and payment actions.