How much cash should a tutoring center keep?

A tutoring center sells sessions, often in prepaid packages. Families pay up front, and tutors are paid by the hour as they teach. Demand follows the school year, with peaks before tests and a quiet summer.

Payroll per run, all-in $ How often you run payroll Fixed bills per month (rent, loans, insurance, software) $ Days your customers take to pay, on average days Cash in the bank today $

Minimum to keep

Two payroll runs plus one month of fixed bills

Comfortable level

Covers costs while you wait for customers to pay, plus one month

Weeks your cash covers

If no customer paid you

The starting numbers are an example. Replace them with yours.

How cash moves in a tutoring center

Prepaid packages bring cash in before the sessions are taught.
Tutor pay follows the sessions, so payroll rises and falls with demand.
Test seasons bring short, busy peaks.
Summer can empty the schedule while rent continues.

Why the usual rule falls short

Two tutoring centers each bring in $30,000 a month. One sells 20-session packages paid up front. The other bills monthly for sessions taught. The first has more cash in September but owes months of sessions.

How the calculator works

Result	Formula
Minimum to keep	2 × payroll per run + 1 month of fixed bills
Comfortable level	Monthly costs × (days to collect ÷ 30 + 1)
Weeks your cash covers	Cash ÷ weekly costs

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Also for tutoring center owners, see the tutoring center monthly financial report.