How much cash arrives this month?
Trace the payment terms and show the unpaid balance.
The question
You support an invented maintenance business. All figures are in USD. Each job is completed and billed in the same month.
| Plan | Latest | |
|---|---|---|
| Jobs | 1000 | 900 |
| Charge per job ($) | 100 | 110 |
| Variable cost per job ($) | 60 | 65 |
| Fixed cost ($) | 20000 | 20000 |
Fictional monthly inputs. Rates apply to each completed job.
Opening cash is $25,000. Customers pay 60% of this month’s invoices this month. All operating costs are paid this month. No other cash flows.
“How much cash arrives this month?”
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A strong answer, step by step
Open each step in turn. This is one strong answer, not the only one.
Step 1: Start with invoices
What would you do here? Open the move you’d make.
Start with invoices
The strong move. 900 completed jobs at $110 give $99,000 in invoices and revenue.
Use the amount collected as revenue
Tempting, but it misses something. All the work was completed this month. Payment timing is separate.
See how a strong candidate says it
“900 completed jobs at $110 give $99,000 in invoices and revenue.”
Why it works: All the work was completed this month. Payment timing is separate.
Step 2: Apply the payment terms
What would you do here? Open the move you’d make.
Use $99,000 as receipts
Tempting, but it misses something. Some customers pay later.
Apply the payment terms
The strong move. 60% × $99,000 = $59,400 in receipts this month.
See how a strong candidate says it
“60% × $99,000 = $59,400 in receipts this month.”
Why it works: Some customers pay later.
Step 3: Reconcile the unpaid balance
What would you do here? Open the move you’d make.
Reconcile the unpaid balance
The strong move. $39,600 remains unpaid if the rest arrives in full.
Treat the unpaid amount as a new cost
Tempting, but it misses something. An unpaid invoice is a receivable.
See how a strong candidate says it
“$39,600 remains unpaid if the rest arrives in full.”
Why it works: An unpaid invoice is a receivable.
Step 4: Compute ending cash
What would you do here? Open the move you’d make.
Add operating profit to opening cash
Tempting, but it misses something. That treats every invoice as paid.
Compute ending cash
The strong move. $25,000 + $59,400 − $78,500 = $5,900 before overtime.
See how a strong candidate says it
“$25,000 + $59,400 − $78,500 = $5,900 before overtime.”
Why it works: That treats every invoice as paid.
The answer, in short
- Decision
- $25,000 + $59,400 − $78,500 = $5,900 before overtime.
- Because
- $39,600 remains unpaid if the rest arrives in full.
- What would change it
- A different collection schedule changes receipts.
Common traps
- Use the amount collected as revenue
- Use $99,000 as receipts
- Treat the unpaid amount as a new cost
- Add operating profit to opening cash
Check your answer
- Start with invoices
- Apply the payment terms
- Reconcile the unpaid balance
- Compute ending cash
Last reviewed Nov 10, 2026