HVAC
HVAC Accounts Receivable Calculator
See how much cash is tied up in unpaid invoices and how far past terms it has drifted.
Result
Days sales outstanding has several formulas and they disagree with one another, so compare this figure against your own over time rather than against somebody else's. The carrying cost is the financing cost of the late money alone; it does not attempt to price the invoices that are never collected at all, which is usually the larger number.
Open the HVAC invoicing demoWhat moves the number
- Days from completion to invoice, which is delay you create yourself.
- Days from invoice to payment, which is where terms and chasing matter.
- Concentration, since one large overdue account is a different problem from many small ones.
Where this one goes wrong
Measuring only the total outstanding. The age distribution is what matters, because collectability falls sharply with age and a small old balance is worth less than a large recent one.
Questions
About this calculator
What is the fastest way to reduce receivables?
Invoice the same day. The largest single delay in most service businesses is between finishing the work and sending the bill, and it is entirely within your control.
How should aging be grouped?
In bands from current through to well past terms, with the value in each. That shows where attention is worth spending far better than a single total.
When does an invoice stop being collectable?
There is no single day, but the probability falls steadily with age. Set a threshold in advance and apply it consistently rather than deciding case by case.
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How to use this calculator
- Open invoices. Sent and not yet paid in full.
- Average invoice value ($). Enter your own figure; the page starts at $1,150.
- Of those, how many are past due. Enter your own figure; the page starts at 18.
- Average days past due. Enter your own figure; the page starts at 44.
- Average monthly revenue ($). Enter your own figure; the page starts at $62,000.
- Your cost of money, annual (%). Your line-of-credit rate, or what the cash would earn elsewhere.
The result updates as you type, so you can try a figure, see what it does to total outstanding, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Open invoices | 48 |
| Average invoice value | $1,150 |
| Of those, how many are past due | 18 |
| Average days past due | 44 |
| Average monthly revenue | $62,000 |
| Your cost of money, annual | 9% |
What comes out
| Result | Value |
|---|---|
| Total outstanding main result | $55,200 |
| Past due | $20,700 |
| Days sales outstanding | 27.1 |
| Annual cost of carrying it | $224.58 |
$55,200 is outstanding, 0.9 months of revenue sitting in other people's bank accounts. $20,700 of it (37.50%) is past due, and carrying that at 9% costs about $224.58 a year.
How sensitive the answer is
Holding everything else steady and changing only average invoice value, this is what happens to total outstanding. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Average invoice value ($) | Total outstanding |
|---|---|
| $575 | $27,600 |
| $863 | $41,424 |
| $1,150 example above | $55,200 |
| $1,725 | $82,800 |
| $2,300 | $110,400 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Open invoices
- Sent and not yet paid in full.
- Average invoice value ($)
- A money amount, starting at $1,150.
- Of those, how many are past due
- A number, between 0 and 100000, starting at 18.
- Average days past due
- A number, between 0 and 3650, starting at 44.
- Average monthly revenue ($)
- A money amount, starting at $62,000.
- Your cost of money, annual (%)
- Your line-of-credit rate, or what the cash would earn elsewhere.
What the results tell you
| Result | What it is |
|---|---|
| Total outstanding | The headline result. A money figure. |
| Past due | A money figure. |
| Days sales outstanding | A decimal figure. |
| Annual cost of carrying it | A money figure. |
Before you rely on this number
Sizing, capacity and load figures here are planning estimates. A real installation depends on the manufacturer's data for the specific equipment, the duct system it is going into, and a proper load calculation for the building. Use this to sanity-check a number or price a job, not to select equipment.
Keep going
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The BDEVY invoicing demo groups every outstanding balance by how late it is, shows the follow-up sequence each invoice is standing in, and flags the ones automation has given up on.