What actually counts as a receivable
- Work delivered, invoiced, and not yet paid in full — the unpaid remainder.
- A partially paid invoice — only the balance, not the original total.
- An overdue invoice — still a receivable, just an aged one.
- A disputed invoice — still a receivable until it is credited or written off.
What does not count, and why people get this wrong
Signed contracts and approved estimates feel like money, but nothing is owed until you have delivered and invoiced. Counting them as receivable inflates the number you use to make decisions.
Deposits are the mirror image. Cash arrived before the work, so it is an obligation to perform rather than a claim to collect. Work that was performed but never invoiced is not receivable either — it is leakage, and no chase cadence will ever find it because there is nothing to chase.
Why a receivable is a balance rather than a document
If you track receivables as a folder of invoices, every partial payment forces you to edit the document or keep the truth in your head. If you track them as balances derived from an invoice total minus payments applied, partial payments are just facts and the number recalculates itself.
This is also what makes AR reportable. Balances add up across a customer, an aging bucket, or the whole company. Documents do not.