Core inputs
| Input | Description | Example |
|---|---|---|
| Scoped balance | Total dollar amount of invoices you are willing to review. | $100,000 |
| Workable share | Percent of the batch that has enough proof and contactability to work. | 60% |
| Expected recovery rate | Percent of workable balance you expect to collect or settle. | 20% |
| Program cost | Internal and vendor cost to review and work the batch. | $4,000 |
| Gross margin on recovered revenue | Margin value of dollars recovered, if relevant to your model. | 80% |
Calculator formulas
Workable balance = scoped balance x workable shareExpected recovered revenue = workable balance x expected recovery rateGross margin value = expected recovered revenue x gross marginNet impact = gross margin value - program costROI multiple = gross margin value / program costExample
If a company reviews $100,000 of aged invoices, determines 60% is workable, and expects a conservative 20% recovery on the workable balance, expected recovered revenue is $12,000. At 80% gross margin, the gross margin value is $9,600. If the program costs $4,000, net impact is $5,600 and the ROI multiple is 2.4x.
Guardrails
- Do not apply one recovery rate to every invoice age, industry, or dispute type.
- Exclude accounts with unresolved legal, compliance, or relationship constraints.
- Separate payment promises from collected cash.
- Track recovered cash, settlement amount, and payment-plan completion separately.
- Use actual batch data after the first cycle instead of generic assumptions.
Best first use
Run this model before a RevRecoup A/R audit to decide which invoice batch is worth reviewing first. A smaller, cleaner batch usually creates better learning than a large messy export.