Learning CenterStage 2 · ControlGuide 11 of 22
Profit & Cash 101
Receivables & Collections
A sale isn't done until the money is in the bank.
Every invoice you send is money you have earned but don't have yet. This guide shows how to read the aging report, how long customers take to pay you, and how much cash is sitting in your receivables waiting to be collected.
The aging report: $120,000 owed, sorted by how late it is
Example company- 0–30 days: $78,000 · 65% current
- 31–60 days: $24,000
- 61–90 days: $10,800 (9%)
- Over 90 days: $7,200 (6%)
The numbers that matter, in plain words
Accounts Receivable (A/R)
Money customers owe for work already done.
From the Balance Sheet
$120,000
Average Daily Sales
What you invoice on a typical day.
$110,000 monthly revenue ÷ 30 days
$3,667
Days Sales Outstanding (DSO)
How long it takes, on average, to get paid.
A/R ÷ Average Daily Sales
32.7 days
Past Due
Money that should already be in the bank.
Everything over 30 days: 35% of A/R
$42,000
At Risk
The older a bill gets, the harder it is to collect in full.
Everything over 90 days
$7,200
Cash Freed by Collecting Faster
Every day you cut from DSO puts $3,667 in the bank.
33 → 25 days: 8 days × $3,667
$29,333
Try it with your own aging report
Starts with the example company's numbersYour DSO and the cash you could free up
Copy the four totals from your aging report and your monthly revenue, then pick a DSO goal.
current · Over 90 days:
A simple collections playbook
Before work
Clear terms in the contract. Deposits on installs. Card or ACH on file for maintenance.
Day 0
Invoice the day the work is done, with photos or notes.
Day 31
Friendly call. Confirm they got the invoice and ask for a pay date.
Day 45–60
Second notice and late fee per your terms. Pause new work.
Day 90
Final demand. Know your state's lien deadlines before you need them.
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