Forecast Accounts Receivable
Carry customer balances forward and explain when recognized sales become cash.
Receivables and customer receipts · FY2026–FY2027
Preview · Illustrative values · EUR thousands / Units as labeledReceivables and collections
| Line item | FY2026 | FY2027 |
|---|---|---|
| Opening receivables | 600.0 | 400.0 |
| Revenue | 3,650.0 | 4,380.0 |
| DSO · days | 40 | 40 |
| Gross receivables | 400.0 | 480.0 |
| Customer receipts | 3,850.0 | 4,300.0 |
| AR cash effect | 200.0 | (80.0) |
| Cash flow from operations | 621.3 | 204.0 |
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Start with the opening customer balance
An accounts receivable model forecasts the unpaid sales carried into and out of each period. Establish opening trade receivables and the revenue expected to create further customer claims. Separate operating customer balances from loans, tax receivables and deposits. Keep gross balances and loss allowances identifiable.
Place this schedule within the working-capital forecast. The concept guide explains why unpaid sales tie up cash. A customer collection changes cash and receivables without recognizing the same sale again.
Use DSO as a closing-balance assumption
For a simplified 365-day annual forecast, AR = revenue × DSO ÷ 365. EUR 3.65 million of credit revenue at 40 days implies EUR 400,000. A target should reflect customer mix, agreed terms and realistic payment behavior rather than an unsupported improvement needed to meet a cash target.
Use the DSO calculator to derive historical days from supplied receivables and sales. Its average-balance ratio differs from the closing-stock convention used here. The revenue forecast supplies activity; do not rebuild its sales assumptions independently in the receivables schedule.
Reconcile receipts rather than changing revenue
Without non-cash movements, collections equal opening gross AR + period revenue − closing gross AR. The preview opens at EUR 600,000, records EUR 3.65 million of sales and closes at EUR 400,000. Customer receipts are EUR 3.85 million: this period also collects EUR 200,000 from the opening balance.
In the next year, EUR 4.38 million of sales and closing AR of EUR 480,000 produce EUR 4.30 million of receipts from an opening EUR 400,000. Growth absorbs EUR 80,000 even though DSO stays at 40. Inspect the balance movement alongside collections and the resulting cash generation.
Use explicit balances when detail explains timing
Known collection expectations or concentrated customer exposures can justify an explicit closing balance instead of a stable day assumption. Reconcile that balance with available receivables; it cannot imply negative receipts. An invoice-by-invoice cash schedule can inform your input, but this page does not promise an invoice-aging system in the product.
The receivables implementation reference documents Amount and Days, source behavior and constraints. Choose the model input that captures the important timing rather than entering collections a second time as an additional cash-flow item.
Keep credit losses separate from collections
A write-off can reduce a reported customer balance without creating a cash receipt. Gross receivables, allowances and the impairment expense therefore need a consistent bridge. Align taxes included in balances with the revenue denominator and explain material acquisition or currency movements when comparing observations.
BalanceCheat distinguishes supported impairment from gross collection movements. Check the gross/net receivables reference before interpreting lower net AR as better cash collection. Changes in collection timing alone affect operating balances and cash, while discounts and credit losses can separately affect earnings.
Review the periods and the customer case
Annual DSO can hide a strong final sales month or a collection peak after year end. Where timing matters, use supported finer source periods with consistent flow bases. The product annualizes period revenue for its 365-day convention; a standalone quarter-based ratio must use the matching quarter’s sales and chosen days.
Compare a slower collection case with the base forecast, then examine AR, CFO and funding together. The cash-flow reference explains the collection-to-cash reconciliation. Return to the commercial assumption when the resulting requirement exceeds the cash the business can arrange.
Frequently asked questions
How is this different from a DSO calculator?
A DSO calculator explores a selected metric or target from supplied figures. A receivables model carries opening balances, activity and collection assumptions through future periods.
Does receiving cash create revenue again?
No. Collecting an already recognized customer balance reduces receivables and increases cash.
Must every business use total revenue for DSO?
Historical analysis should match receivables with relevant credit sales. The model’s day driver uses its eligible revenue base, so document any approximation.
Does a receivable write-off release cash?
No. It is a non-cash movement requiring its own treatment, separate from customer collections.