How revenue flows, where it sits, where it gets stuck.

Northwind’s revenue arrives in three distinct shapes. Sixty-two percent of it is institutional retainers — high-margin, slow-moving, with the longest sales cycles of the three. Twenty-seven percent is project work, lumpier and structurally less forecastable. The remaining eleven percent is licensing income, which is so much smaller than the other two that it has been treated as incidental — though the margin profile suggests it shouldn’t be.

The shape of the flow matters more than the total, because the shape determines what happens when one of the three sources moves. Below is a working diagram of the flow as it stands today.

§ 4·1Where cash gets stuck

The cash cycle runs a median 47 days. Contracts are signed quickly but invoiced slowly — a median 12 days between delivery and invoice, and another 28 days between invoice and payment. The first delay is a habit; the second is a structure. Both can be moved.

1. Invoices are batched monthly. Moving to on-delivery invoicing recovers approximately 10 days from the cycle without changing any external behavior.
2. Default payment terms are Net-30. Renegotiating the top-5 clients to Net-15 (which is consistent with their actual payment behavior already) recovers another ~8 days.
3. Project work currently invoices in arrears. A 10% deposit front-loads cash by roughly one cycle and would not, given current demand, cost any deals.

Three structural interventions are ranked below in Plate 04·A. Read the Detail view to see them.

§ 4·2Revenue concentration

Three clients account for 54% of retainer revenue. This is the central risk in the current financial architecture. The loss of any single one would require four to six months of recovery — and during those months, the firm’s ability to take on new work would be structurally constrained.

For Northwind specifically, 20% is the threshold at which a loss becomes survivable without immediate headcount action. The threshold is practice-specific and should be re-derived at each rebuild of the Blueprint.