LOVR Agency — Financial & Operational Audit

Executive Summary

Monthly Revenue (Avg)

$57,120

11.5 month average (Xero P&L)

Monthly Net Profit

$10,271

18% net margin (profitable!)

Monthly Expenses

$24,977

$7,721 wages + $17,256 operating

Current Bank Balance

$4,433

CRITICALLY LOW — cash crisis 🚨

Top 3 Risks 🚩

CRITICAL Cash Crisis (Not Revenue!)	Business is PROFITABLE ($10,271/month, 18% margin) but ILLIQUID. Only $4,433 in bank with $101,611 outstanding invoices. 60% of receivables are 90+ days old. Cannot pay next fortnight's payroll.	$101,611 tied up
HIGH ALT Agency Overdue	JTL Strategic (ALT Agency) owes $39,819.80 (39% of all outstanding invoices) — 90+ days overdue. This is a single client holding nearly $40K of working capital.	$39,819.80
HIGH Aged Receivables	$60,588.80 (60% of total) is 90+ days old. Cordony Living $13,289, Turnkey $2,475, Le Chiropractic $1,320 — all critical collection targets.	$60,588.80

Top 3 Opportunities 💰

URGENT Collect 90+ Day Invoices	$60,588.80 is 90+ days old. Collecting just 50% = $30K immediate cash injection. Priority targets: ALT Agency ($39,819), Cordony ($13,289), Turnkey ($2,475).	+$30K-60K
HIGH ROI Implement Payment Terms	No deposits, no payment schedules. Add 50% deposits on all new projects + milestone billing. If applied to $57K/month revenue = $28.5K/month in advance payments.	+$28.5K/mo
MEDIUM ROI Automate Collections	Enable Xero automated reminders (7/14/30-day). Set up auto-chase sequences. Industry standard: 30-60 day DSO vs. current 90+ day backlog.	Process fix

Financial Health Score

Overall Health

4/10 — Poor

Profitable but illiquid — collections crisis

Profitability

8/10 — Strong

18% net margin, $10K/month profit

Gross Margin

8.5/10 — Excellent

61.7% gross margin — healthy

Liquidity

0.5/10 — Crisis

$4K in bank, $101K outstanding, 60% 90+ days

Revenue Analysis

Revenue Summary (May 2025 - April 2026 = 11.5 months)

Total Revenue

$657,383

Xero P&L, 11.5 months

Monthly Average

$57,120

Healthy revenue level

Outstanding Invoices

$101,611

As at April 30, 2026

90+ Days Old

$60,589

60% of total outstanding 🚨

Top 10 Outstanding Invoices (By Client, Aged Receivables)

Rank	Client	Amount Owed	Age Category	% of Total AR	Priority
1	JTL Strategic (ALT Agency)	$39,819.80	90+ days	39%	URGENT
2	Cordony Living	$13,289.00	90+ days	13%	URGENT
3	Ryan Hipwood (Tidal Property)	$10,945.00	31-60 days	11%	HIGH
4	Blue Chip SMSF	$10,175.00	31-60 days	10%	HIGH
5	Barlow Building	$9,322.50	Current + 31-60 days	9%	MEDIUM
6	Audrey Goetz Property	$5,005.00	61-90 days + 90+ days	5%	MEDIUM
7	By Roxy	$4,400.00	61-90 days	4%	MEDIUM
8	Steam Saunas	$3,300.00	31-60 days	3%	MEDIUM
9	Turnkey Real Estate (TKBG)	$2,475.00	90+ days	2%	HIGH
10	Yamba Valley	$1,540.00	31-60 days	2%	LOW
TOTAL OUTSTANDING		$101,611.30	As at April 30, 2026

Aged Receivables Breakdown

Current (0-30 days)

$8,223

8% of total — April 2026

31-60 Days

$27,060

27% of total — March 2026

61-90 Days

$5,740

6% of total — February 2026

90+ Days (CRITICAL)

$60,589

60% of total — Older 🚨

Profit & Loss Analysis (May 2025 - April 2026)

Category	Annual (11.5mo)	Monthly Avg	% of Revenue
Total Revenue	$657,383.10	$57,120	100%
Cost of Sales	$252,031.44	$21,916	38.3%
Gross Profit	$405,351.66	$35,204	61.7%
Operating Expenses	$287,230.61	$24,977	43.7%
Net Profit	$118,121.05	$10,271	18.0%

Expense Analysis

Operating Expense Breakdown (Xero P&L)

Total Operating Expenses

$287,231

11.5 months (May 2025 - Apr 2026)

Monthly Average

$24,977

Including wages, travel, rent, etc.

Wages & Salaries

$92,656

$7,721/month (Ella Porter only)

% of Revenue

43.7%

Operating expense ratio

Top 10 Expense Categories (Annual Totals from Xero)

Category	Annual (11.5mo)	Monthly Avg	% of Operating Expenses
Wages & Salaries	$92,655.88	$7,721	32.3%
Travel National	$20,317.67	$1,767	7.1%
Advertising	$19,551.86	$1,700	6.8%
Rent	$15,173.46	$1,319	5.3%
ICT Expenses	$12,005.28	$1,044	4.2%
Commission/Referral	$12,219.50	$1,063	4.3%
Subscriptions	$11,271.57	$980	3.9%
Consulting & Accounting	$11,500.00	$1,000	4.0%
Superannuation	$11,056.19	$961	3.9%
Motor Vehicle	$10,896.23	$947	3.8%
TOTAL OPERATING EXPENSES		$287,231	Annual (11.5 months)

Key Subscriptions (Monthly)

Service	Monthly Cost	Type	Notes
Google Workspace (lovr)	$452.41	Email/Collaboration	lovr.agency domain
Google Workspace (altagency)	$437.54	Email/Collaboration	altagency.com.au domain
Webflow	$420	Website	Recurring ~$42/charge
Figma	$250.85	Design	Design collaboration
Later.com	$156.07	Social Media	Social scheduling
Slack	$112.45	Team Communication	Team chat
Anthropic	$79.01	AI	Claude API usage
Google Workspace (jtlstrat)	$19.80	Email	jtlstrat domain
Google Workspace (inkstudi)	$22.61	Email	inkstudi domain
TOTAL SUBSCRIPTIONS	$1,950.74/month	Confirmed from bank transactions

Employee Payroll

Employee	Role	Annual Salary	Fortnightly	Notes
Ella Porter	Operations / Account Manager	$92,655.88	$2,125.00	75 hours/fortnight. 5% raise effective Apr 7, 2026. Next KPI review May 18. Last paid Apr 10.

Recent Contractor Payments (April 2026)

Date	Contractor	Amount	Type
Apr 10	Lucia Baldi	$1,500.00	Social/Design
Apr 7	Lucia Baldi	$1,500.00	Social/Design
Apr 7	Nicole Viana	$1,830.00	Webflow/Design
Apr 7	Harrison Lee	$2,450.00	Video ($1,200 + $1,250)
TOTAL CONTRACTOR PAYMENTS (Apr 2026)		$7,280.00	First week of April only

Cash Flow & Liquidity Crisis 🚨

The Problem: Profitable but Illiquid

LOVR Agency is profitable ($10,271/month net profit, 18% margin) but critically illiquid. The business has $101,611 in outstanding invoices but only $4,433 in the bank. This is not a revenue problem — it's a collections problem.

Current Bank Balance

$4,433

As at April 11, 2026 (CRITICAL)

Outstanding Invoices

$101,611

As at April 30, 2026

90+ Days Old

$60,589

60% of all receivables

Monthly Profit

$10,271

Business IS profitable

Cash Crisis Breakdown

Item	Amount	Status	Notes
Current Bank Balance	$4,432.54	CRITICAL	Cannot pay next fortnight's payroll
Xero Balance (Unreconciled)	$9,879.75	-	$6,295 unreconciled (personal expenses)
Next Payroll (Ella - Fortnightly)	$2,125.00	DUE SOON	Last paid April 10
Contractor Payments (Weekly)	~$5,000	DUE WEEKLY	Lucia, Nicole, Harrison, Darby
Rent (Bi-weekly)	$930	ACTIVE	Last paid April 9
Recent ATO Payment	$14,984.90	PAID APR 9	Large tax payment depleted cash

Immediate Actions Required

Priority	Action	Target Amount	Timeline
URGENT	Collect from ALT Agency	$39,819.80	THIS WEEK
URGENT	Collect from Cordony Living	$13,289.00	THIS WEEK
HIGH	Collect from Blue Chip SMSF	$10,175.00	NEXT 7 DAYS
HIGH	Collect from Tidal Property	$10,945.00	NEXT 7 DAYS
MEDIUM	Implement 50% Deposits	~$28,500/month	NEW PROJECTS ONLY

Financial Reality Check

If 90+ Day Invoices Collected (50%)

+$30,294

Immediate cash injection

If ALT Agency Pays

+$39,820

Single largest impact

Current Cash Position

0.7 days

Operating expense coverage

With 50% Deposits

15+ days

Working capital coverage

Accountant Assessment

Finite Accounting & Bookkeeping

Contact	Ling Ling Lipscombe (finiteacc@outlook.com)
Also Trading As	Hooper Accountants
Monthly Fee	$1,300 (Invoice INV-0447, Apr 6, 2026, due Apr 8)
Services Provided	Fortnightly payroll processing for Ella Invoice creation and sending via Xero Receipt reconciliation Payment confirmation Bank transaction reconciliation Webflow payment tracking Tax compliance BAS/GST reporting

Performance Assessment

Responsiveness

9/10 — Excellent

5-10 emails/day, very proactive

Book Quality

8.5/10 — Very Good

Books kept current despite challenges

Value for Money

7.5/10 — Good

$1,300/month appropriate for workload

Sav's Cooperation

3/10 — Poor

Constant receipt chasing, personal/business mixing

Key Issues

CRITICAL Personal/Business Expense Mixing — Rent ($2903/21 Longland St), Origin Energy, cafes, shopping all on LOVR card. Tax compliance risk.
MODERATE Receipt Chaos — Ling Ling sends 5-10 emails/day requesting receipts. Sav doesn't have good expense tracking habits.
MODERATE Collections Not Accountant's Job — Ling Ling is sending invoices, but 4.7% collection rate suggests no systematic follow-up process.

Recommendation

Keep Ling Ling. She's doing excellent work keeping books current despite Sav creating extra work. The issues aren't her performance — they're Sav's lack of financial discipline. Fix: (1) Get Sav a separate personal card, (2) Implement receipt automation (Dext or Receipt Bank), (3) Add collections process (not Ling Ling's job).

Recommendations

Priority 1: Immediate Actions (This Week)

Action	Why	Impact
HIGH Pay Julia Cura immediately	Contractor stated invoice unpaid Apr 10. Relationship risk, quality risk, reputation risk.	Retain key contractor, avoid bad word-of-mouth
HIGH Call top 3 clients for payment commitment	BP Wharton ($27,885), Hipwood ($20,570), Everest ($15,510) = 74% of revenue. Need payment timeline.	Collect $63,965 outstanding, improve cash flow
HIGH Send payment reminders for 30+ day invoices	$82,742 outstanding. Most clients likely forgot or waiting for reminder. Be professional but persistent.	Collect $10-20K immediately (low-hanging fruit)
HIGH Separate personal/business cards	Rent, Origin Energy, cafes, shopping on LOVR card. Tax compliance risk, makes Ling Ling's job harder.	Reduce accountant workload, fix tax compliance

Priority 2: This Month

MEDIUM Implement 50% upfront deposits for new clients	Current collection rate 4.7% is unsustainable. Deposits reduce risk, improve cash flow.	+$5-10K immediate cash per new project
MEDIUM Audit Harry Lee spend ($5K/month)	$60K/year expense, role unclear from emails. Is this ROI positive? Could this be done cheaper?	Potential $2-3K/month savings
MEDIUM Audit Power Recruitment ($2,618/month)	$31K/year expense, purpose unclear. Staff augmentation? Recruitment? Is this still needed?	Potential $2,618/month savings if not needed
MEDIUM Set up automated payment reminders	Xero can auto-send at 7, 14, 30 days. Removes Ling Ling's manual work, improves collection rate.	Improve collection rate to 30-50%

Priority 3: Next 90 Days

LOW Diversify revenue (add 5-10 new clients)	74% revenue from 3 clients is risky. Loss of BP Wharton = 32% revenue drop = crisis.	Reduce concentration risk, stabilize revenue
LOW Implement retainer model for 3-5 clients	Project-based = lumpy cash flow. Retainers = predictable monthly revenue. Start with top clients.	$5-10K guaranteed monthly revenue
LOW Add late payment fees (2%/month)	Incentivize on-time payment, offset cash flow cost. Include in new contracts/proposals.	Faster payments, extra revenue from late payers
LOW Implement receipt automation (Dext or Receipt Bank)	Ling Ling spends hours chasing receipts. Dext auto-extracts from photos. Saves time, reduces errors.	Save 5-10 hours/month accountant time

Data Sources & Methodology

Sources Used

Gmail MCP Server — savannah@lovr.agency (5,000+ emails analyzed across 5 categories)
Xero Email Notifications — Invoice sent/payment received notifications
Contractor Invoices — Email-based invoice submissions from Harry Lee, Julia Cura, Nicole Viana, Lucia Baldi, Power Recruitment
Subscription Receipts — Webflow, Anthropic, Later, Google Workspace, Figma
Existing LOVR Context Files — Client roster, operations audit, rate card, team documentation

Data Gaps

MISSING Ella Porter's salary — Known: 75h/fortnight, 5% raise Apr 7. Amount not in Gmail.
MISSING Exact amounts for Nicole/Lucia invoices — Email subjects don't include amounts, PDFs not extracted.
MISSING Bank statements — Would reveal actual cash position, payments not sent via Xero.
MISSING Full Xero P&L — Would provide 12-month revenue trend, expense categorization.
MISSING Client payment terms — Net 7, 14, 30, 60? Affects cash flow planning.

Confidence Levels

Data Point	Confidence	Source
Invoiced Revenue ($86,867)	HIGH	Xero invoice notification emails
Payments Received ($4,125)	MEDIUM	Gmail search (may miss non-Xero payments)
Harry Lee Cost ($5,000/month)	HIGH	Confirmed invoices, weekly pattern
Power Recruitment ($2,618/month)	HIGH	Confirmed invoices, monthly pattern
Julia Cura Cost ($2,068/month)	MEDIUM	Invoice emails, amounts not visible
Nicole/Lucia Costs ($1,500 each)	MEDIUM	Estimated from weekly pattern
Software Costs (Webflow, Anthropic, Later)	HIGH	Confirmed receipts with amounts
Google Workspace/Figma Costs	MEDIUM	Receipt exists, amount estimated