Measure collection time and the cost of late receipts or payment discounts. Start with project time logs, licence invoices and retainer scopes. Each example below uses hypothetical values you can replace.
Receivable Collection Days
Estimate days of credit sales represented by average receivables.
Collection days = receivables / credit sales × period days
Show example inputs and result
| Average trade receivables | 20,000 |
|---|---|
| Credit sales in period | 100,000 |
| Days in period | 90 days |
Result: 18 days.
Cash sales do not create trade receivables. Including them can make collection time look artificially short.
Open receivable collection daysLate Invoice Carrying Cost
Estimate an internal financing cost associated with delayed receipt.
Carrying cost = invoice × annual rate × delay days / 365
Show example inputs and result
| Unpaid invoice amount | 10,000 |
|---|---|
| Days delayed | 30 days |
| Annual cash carrying-cost assumption | 12 % |
Result: 98.6301 .
This tool estimates internal cost only. Contract terms and local law determine whether any fee may be charged.
Open late invoice carrying costEarly Payment Discount Cost
Compare a payment discount with the time it accelerates receipt.
Simple annualized discount cost = discount / (1 − discount) × 365 / days accelerated × 100
Show example inputs and result
| Discount offered | 2 % |
|---|---|
| Discount payment day | 10 days |
| Normal payment day | 30 days |
Result: 37.2449 % annualized.
It buys only a short acceleration in cash receipt. Annualizing that short interval can produce a large percentage.
Open early payment discount costCustomer Deposit Gap
Estimate the pre-completion cash gap after a customer deposit.
Funding gap = early cash cost − quote × deposit rate
Show example inputs and result
| Cash needed before customer balance payment | 3,000 |
|---|---|
| Total customer quote | 6,000 |
| Deposit rate | 30 % |
Result: 1,200 .
Compare the deposit with cash due before the final customer payment, rather than with total project cost alone.
Open customer deposit gapUse the results in your plan
For a managed it service business, review licenses, support labour, and monitoring across the complete workflow. Use one consistent period and delivery unit: a client month. Compare the assumptions with recorded outcomes after delivery, then update the estimate.
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