Accounts Receivable

A business selling only to individuals barely needs the term. The card charge and the money arriving are the same event. Business customers work differently. They sign a contract, use the service, receive an invoice, route that invoice through their own approval chain, and pay by bank transfer on a fixed date afterward. An invoice is the bill itself — a line-by-line document showing which plan, how many seats, how many months, and therefore how much. Between the day the service is delivered and the day money lands in the bank account, a month goes by, sometimes three.

Without a name for the money floating in that gap, a company can't describe its own position. The sale clearly happened and the cash clearly hasn't arrived, and no single word separates those two facts.

Pagedeck ran into this the month after its first ten business accounts closed. Grace asked why the bank balance looked the same as last month when revenue had come in at 400 million won, and the answer was that invoices had gone out three weeks earlier with a due date of the tenth of the following month. Both numbers were correct. They were describing different things, and only after the gap had a name could the two sit in the same conversation.

A receivable appears on the books the moment an invoice is issued and disappears the moment payment is confirmed. It lives on the asset side of the balance sheet, the statement listing what a company owns and owes on one specific day. Cash it isn't, but a legal claim to cash counts as something owned.

Each one moves through four stages.

1. Creation — it appears when the service has been delivered and the invoice sent, regardless of payment. Accrual accounting requires recording on the date the transaction happened rather than the date cash moved.
2. Waiting — the invoice carries payment terms, typically 30 days from issue. Larger customers often push for 60 or 90.
3. Reconciliation — once the date passes, someone matches bank statement lines against the list of open invoices. Bank transfers announce neither success nor failure, so nothing is known until a person checks. Transfers also arrive under whatever name the customer's accounting system uses, which rarely matches the account name on the contract, so matching takes judgment rather than a lookup.
4. Clearing — paid items come off the list. Unpaid ones move to collections, and anything judged uncollectible is written off as an expense.

What's outstanding gets bucketed by how late it is: within 30 days, 60 days, over 90. The same total means completely different things depending on the mix. If 180 million of a 200 million won balance sits inside 30 days, nothing is wrong and the dates simply haven't arrived. If 100 million of it has crossed 90 days, collection itself is in doubt. Past that line, sales joins finance on the follow-up, because items that stale usually stalled over a changed contact or a disputed line item rather than a lack of money.

Cash planning reaches for it first. How much arrives this month is set by which previously issued invoices come due this month, not by how much was sold this month. Runway — the number of months current cash lasts at the current spend rate — gets calculated off that list rather than off a revenue curve.

Investors open it during due diligence, the pre-deal review where they inspect a company's numbers and documents directly. An aging table reads as evidence about the quality of revenue. Revenue climbing every month while the over-90 bucket thickens alongside it describes a company that can sell but can't collect.

It shapes sales rules too. Paying commission on cash received rather than on contract signed removes the incentive to push deals through on terms nobody can actually collect against. Many companies pair that with a hard rule against booking new business for an account that already owes, so one unpaid invoice doesn't quietly turn into three.

"We beat the quarterly revenue target but receivables went up with it. Over-90 is at 80 million."

The sales happened, but 80 million of that isn't company money yet and has entered the range where collection gets hard.

"No new contracts for that account until their receivables clear."

A block on selling more to a customer who already owes. The larger the exposure, the worse it goes wrong all at once.

"Payment lands on the tenth of next month, so it won't show in this month's bank balance."

Booked as revenue already, which makes the performance number right, but not part of the cash available this month.

At Pagedeck, Grace opens the aging table in the first week of every month. One month two items sat in the over-90 bucket. On the first, the customer's contact had resigned and the approval stopped halfway. On the second, the seat count on the invoice didn't match the contract, so the customer's finance team rejected it.

The two needed different responses. The first ended once Sofia called the account and found the new contact. The second only moved after a corrected invoice went out. Neither was about a customer short on money. Open up a badly aged receivable and the obstacle is usually paperwork or a person.

Counting receivables as cash is the most common error. They sit one line under cash on the balance sheet and are already reflected in revenue, which makes the reading easy to arrive at. But this is a claim, and a claim may pay in 30 days or never pay at all. Blend the two and runway inflates. Adding 200 million in receivables to 600 million in cash gives 800 million, which against a monthly burn of 100 million looks like eight months — while the spendable number is 600 million, so six. Those two months decide whether there is time to prepare the next round.

Reading a rising balance as a growth signal is the other one. Selling more does produce more to collect, so the interpretation is reasonable. The catch is the rate. When receivables grow faster than revenue, the company isn't selling more, it's getting paid later. Revenue up 30 percent against receivables up 80 percent means collection has started jamming somewhere, and left alone the quarter with the best reported numbers becomes the quarter with the thinnest bank account.