📌 Stage 2 · People and Revenue · Revenue Plan · NET 30 AR roll-forward · 40–50 min

NET 30 in practice: a 40 / 45 / 15 collection curve

Learning goals

  • Explain the receivables roll-forward identity: opening + billings − collections = closing
  • Model NET 30 as a three-tranche collection curve
  • Read the collection-timing detail rows and the January reach-back
  • Prove the year ties: collections plus the change in receivables equals billings

Concepts

The roll-forward identity

Accounts receivable is a running balance, not a monthly total. Each month the studio adds what it billed and subtracts what it collected, and what is left rolls into the next month:

=C12+C13-C14

Revenue Plan C15 (January closing receivables): opening $47,025.00 + January billings $48,875.00 − January collections $57,125.00 = $38,775.00. February's opening (D12) simply links back to this cell, so the balance can never drift.

💡 Tips:

  • The same identity works for cash (Lesson 14) and for the loan balance (Lesson 10) — learn it once, use it everywhere.

NET 30 as a collection curve

“NET 30” means the invoice is due 30 days after the invoice date, but real clients pay on a spread. The model approximates that spread with three tranches driven from Assumptions: 40% of billings collected in the month billed (F19), 45% in month +1 (F20), and 15% in month +2 (F21). The Best case speeds the curve to 50 / 45 / 5; the Worst case slows it to 30 / 45 / 25.

That curve is why the studio can bill $48,875.00 in January and still collect $57,125.00: part of January's money was billed in 2025.

=Assumptions!$F$19*C13

Revenue Plan C17 (collected in the month billed): 40% × $48,875.00 = $19,550.00 in January.

=Assumptions!$F$20*C13

Revenue Plan D18 (February, one month back): 45% × January's $48,875.00 = $21,993.75 — the formula this lesson has you retype.

=Assumptions!$F$21*Assumptions!$C$8

Revenue Plan C19 (January, two months back): 15% × the $61,500.00 of November 2025 billings typed on Assumptions = $9,225.00. From March onward this row reads the sheet's own billings two columns left.

Collections are the sum of the tranches

Row 14 adds the three tranches, and that row — not billings — is what feeds the Cash Flow sheet:

=C17+C18+C19

Revenue Plan C14: $19,550.00 + $28,350.00 + $9,225.00 = $57,125.00 collected in January. Column O sums to the FY figure $689,156.25.

The year must tie

Two independent facts must agree, and they do: FY billings of $690,000.00 minus FY collections of $689,156.25 leaves $843.75, which is exactly the growth in receivables ($47,868.75 closing in December minus $47,025.00 opening in January). If those two numbers ever disagree, a tranche formula or an input is wrong — this is the workbook's most useful standing check.

Practice

Fixed case: Harbor Creative Studio LLC, a four-person design studio in Austin, Texas, planning calendar year 2026. Cached numbers are the Base scenario. Pale-green cells are formulas; white cells are typed inputs. The exercise opens on the sheet this lesson teaches. Cell D18 (February collections from January billings) is blank: retype the one-month-back tranche.

  1. Open Revenue Plan and find the roll-forward — The exercise opens on Revenue Plan. Rows 12 to 15 are the roll-forward: opening receivables, billings (linked from row 10), collections, and closing receivables.
  2. Retype the February tranche in D18 — Cell D18 (collected from last month's billings) is empty. Type =Assumptions!$F$20*C13 and confirm: it should return $21,993.75 = 45% × January's $48,875.00.
  3. Verify the January tranches — C17 should read $19,550.00, C18 $28,350.00, C19 $9,225.00, and C14 $57,125.00. C15 (January closing receivables) should read $38,775.00.
  4. Check the December close — N15 (December closing receivables) should read $47,868.75, and O14 (FY collections) should read $689,156.25.
  5. Run the tie-out — Confirm O13 ($690,000.00) − O14 ($689,156.25) = $843.75 = N15 ($47,868.75) − C12 ($47,025.00). The roll-forward is internally consistent.

Online exercise

The spreadsheet below is editable — follow the practice steps right on this page. Steps that need ribbon menus should be done in your own Excel with the downloadable practice file.

表格加载中…

Checklist

Work through each item; when every box passes, this lesson is done:

  • ☐ Retyped =Assumptions!$F$20*C13 in D18 and it returned $21,993.75
  • ☐ January closing receivables C15 reads $38,775.00 and December closing N15 reads $47,868.75
  • ☐ FY collections O14 read $689,156.25 against FY billings of $690,000.00
  • ☐ Ran the tie-out: billings − collections equals the change in receivables ($843.75)