Calculator Inputs
Example Data Table
| Gross | Change Orders | Retainage | Payments | As-of | AR Balance | Aging |
|---|---|---|---|---|---|---|
| 50,000 | 2,500 | 10% | 15,000 | 2026-01-25 | Calculated | Depends on due date |
| 80,000 | -1,000 | 5% | 40,000 | 2026-01-25 | Calculated | Depends on days past due |
Formula Used
- Sub-total = Gross Amount + Change Orders − Discounts
- Tax = Sub-total × (Tax Rate ÷ 100)
- Net Billed = Sub-total + Tax − Credit Memos
- Retainage Held = Net Billed × (Retainage Rate ÷ 100)
- Amount Subject to Receivable = Net Billed (or Net Billed − Retainage Held)
- AR Balance = Amount Subject to Receivable − Payments Received
- Days Past Due = max(0, As-of Date − Due Date)
- Simple Finance Charge = Overdue AR × (APR ÷ 100) × (Days Past Due ÷ 365)
- Monthly Compounding = Overdue AR × [(1 + APR/12)^(Days/30) − 1]
- DSO = (Average AR ÷ Credit Sales) × Days in Period
How to Use This Calculator
- Enter the gross billed amount, including any change orders.
- Apply discounts, tax rate, and any credit memos or adjustments.
- Set retainage and choose whether to include it in receivables.
- Input payments received to date for this invoice or pay app.
- Confirm invoice, due, and as-of dates for accurate aging.
- Adjust aging buckets to match your internal reporting bands.
- Optionally add APR and interest method for finance charges.
- Press Calculate to view summary, aging, and export options.
Professional Notes for Construction Receivables
1) Why receivables matter on job cash flow
Receivables are the bridge between earned revenue and usable cash. On construction projects, payment timing affects payroll, material releases, subcontractor invoices, and bonding capacity. Tracking billed versus collected amounts helps reduce borrowing costs and prevents schedule disruption caused by liquidity gaps.
2) Net billed, adjustments, and accuracy
This calculator starts from gross billed value, then applies change orders, discounts, taxes, and credits to produce net billed. Keeping each adjustment visible supports audit trails and reduces disputes. Negative change orders or credits should be documented with supporting backup and approval dates.
3) Retainage treatment in reporting
Retainage is often withheld until milestones or closeout. Many firms exclude retainage from standard receivable exposure to focus on collectible near-term cash. Others include it to show total billed risk. Use the toggle to match your internal policy and owner contract terms.
4) Aging buckets aligned to follow-up actions
Aging categories translate days past due into operational steps: reminder calls, documentation checks, escalation, or stop\-work notices where contractually allowed\. Customize buckets \(30/60/90 or alternative\) to match your collection cadence and the payment habits of specific owners or GCs\. For example, many firms trigger reminders at 10 days, formal notices at 45 days, and executive outreach after 75 days, depending on customer risk level\.
5) Days outstanding versus days past due
Days outstanding measures elapsed time since invoice, useful for internal process performance. Days past due compares as-of date to contractual due date, which drives aging placement and finance charge eligibility. Keeping both metrics helps distinguish slow processing from true delinquency.
6) Finance charges and policy consistency
When contracts allow, finance charges can encourage timely payment and recover carrying costs. The calculator applies APR only to overdue positive balances, using either simple day-count or approximate monthly compounding. Apply one method consistently across customers to avoid disputes and maintain credibility.
7) DSO as a portfolio KPI
Days Sales Outstanding (DSO) is typically reviewed across the entire receivables portfolio, not a single invoice. Enter average receivables and credit sales for the period to estimate DSO. Comparing DSO month-to-month can reveal process improvements or emerging collection risk.
8) Practical data hygiene for stronger collections
Capture invoice dates, due dates, and payment references accurately. Match payments to invoices promptly, track lien waivers and closeout documents, and log dispute reasons. Clean data improves forecasting, supports faster approvals, and provides defensible documentation during negotiations.
FAQs
1) Should I include retainage in receivables?
If your team manages near-term collections, excluding retainage often helps. If you need total billed exposure for forecasting, include it. Match the setting to your contract reporting policy.
2) What if payments exceed the receivable amount?
The balance becomes a credit. Confirm whether the payment was misapplied, duplicated, or intended to cover another invoice. Credit balances should be reconciled quickly.
3) How are aging buckets assigned?
Aging is based on days past due, calculated from due date to as-of date. If not overdue, it is shown as current. Customize bucket limits to match your reporting.
4) When do finance charges apply?
Finance charges apply only when the balance is positive and overdue, and an APR is provided. Always confirm contract language and local rules before charging interest.
5) Which interest method should I choose?
Use simple day-count for straightforward calculations and easy explanation. Use monthly compounding if your policy specifies compounding. Keep the method consistent across customers.
6) Is DSO valid for a single invoice?
DSO is best at the portfolio level. For a single invoice, rely on days outstanding and days past due. Use DSO inputs for period-wide benchmarking.
7) How can I use the exports in audits?
Exported summaries provide a repeatable snapshot of inputs, calculated aging, and charges as of a specific date. Pair exports with contracts, approvals, and payment confirmations.
Better receivables control keeps projects funded and predictable always.