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Worked Example: Backlog Capacity and Collection Delay

Work through an overloaded delivery schedule and a delayed client receipt, showing why capacity and cash gaps require separate calculations.

By PriceAndProfit Editorial Updated

A service team has 320 delivery hours remaining on accepted work and can deliver 80 hours per week. Its client deadline is three weeks away, leaving 80 hours uncovered. The team also opens the period with $5,000 cash, expects $20,000 of receipts and schedules $17,000 of payments. Capacity and cash answer different questions; a paid invoice does not clear a delivery bottleneck.

Capacity gap = 320 − 80 × 3 = 80 hours; stressed cash = $5,000 + $20,000 − $4,000 − $17,000 = $4,000
Hypothetical inputs and independently checked arithmetic
MeasureCalculationResult
Weeks of work 320 / 80 4 weeks
Capacity before deadline 80 × 3 240 hours
Uncovered work 320 − 240 80 hours
Closing cash before delay $5,000 + $20,000 − $17,000 $8,000
One client receipt delayed $8,000 × 50% $4,000
Closing cash after delay $8,000 − $4,000 $4,000
Buffer above chosen reserve $4,000 − $2,000 $2,000

Interpret the result

The selected client accounts for 40% of total scheduled receipts: $8,000 divided by $20,000. Delaying half that receipt lowers this period's cash by $4,000 without automatically reducing earned revenue. Put the delayed amount into the later collection period, and avoid recording it as both a receipt loss and a second expense. The $2,000 reserve is a target, so it is compared with closing cash rather than paid out.

Check before applying the example

Adding 80 delivery hours before the deadline would close the aggregate capacity gap, but any contractor or overtime spending would also change the cash schedule. Its availability, skill match and contractual cost need separate evidence. Conversely, collecting the delayed receipt sooner would improve cash but leave the 80-hour workload gap intact. Map the two constraints together before agreeing to a revised scope or start date.

Use your own inputs

The calculator uses the same stated decision boundary.

Method reference: OpenStax: Operating Budgets. Checked October 22, 2026. Capacity, sales and delivery-cost budgets; no market rate assumptions.

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