Two kinds of income, two kinds of forecast
Agencies, studios and consultancies usually have a mix of retainers and project work. They behave differently, so forecasting them the same way gives a poor result.
Retainers: forecast the pattern
A retainer repeats. Put it in as a recurring item with its billing date, amount and the client's real payment habit. Then check three things: the notice period (how many months of income are secure), the renewal date, and whether the amount changes with scope.
A retainer that renews in six weeks is not certain. Treat the months after the renewal date as less secure than the ones before it.
Projects: forecast the milestones
Project income arrives when you invoice, which is usually on milestones, at the start and end, or monthly in arrears. Forecast the invoice date and then the payment date, which is the invoice date plus the client's usual payment time. A project that finishes in June with 60-day terms is July or August cash.
Staged invoicing improves cash flow. If a long project is invoiced only at the end, you fund the whole cost yourself in the meantime.
Deals not yet signed
Keep signed and unsigned work apart. Your base forecast should contain only what you have a right to invoice. Model likely work separately, as a scenario, so you can switch it on and see how much it changes the picture.
That way the forecast is never flattered by work you have not won, and you can still see what a win, or a loss, would do.
The costs that follow the work
Freelancers, suppliers and pass-through costs often have to be paid before the client pays you. Forecast them alongside the income they relate to, in the week they are due, not the week you are reimbursed.
How Cadence handles it
Cadence supports recurring income and costs, invoices with their own due dates and payment status, and scenarios for wins and losses. See who Cadence is for.