Glossary
Outstanding balance
The part of an agreed fee that a client has not yet paid: the agreed fee minus everything recorded as received.
What it means
The outstanding balance is the single most useful number in client billing, because it is the one that tells you whether to act. It is calculated as the agreed fee less the sum of all payments recorded against it.
It is sometimes called the due amount, the receivable or simply "what they owe". The terms are interchangeable in a small business context, though "receivable" carries an accounting connotation and usually refers to the total across all clients rather than one.
Two conventions are worth settling. First, a balance should stop at zero rather than going negative when a client overpays — a negative receivable is confusing every time it is read, and the surplus is better shown separately as a credit. Second, the balance should be measured against the agreed fee rather than against what has been invoiced, since work you have not yet billed is still work you are owed for.
Reading a balance correctly
An agreed fee of $50,000 with $35,000 received gives an outstanding balance of $15,000.
If the client then pays $20,000 — $5,000 more than the balance — the outstanding figure becomes $0 rather than −$5,000, and the $5,000 surplus is shown as a credit to be refunded or carried against future work.
If the scope later grows and the fee is renegotiated to $70,000, the balance recalculates against the new total: $70,000 less the $55,000 received leaves $15,000 outstanding again.
Illustrative example. Names and amounts are made up.
How this works in Umikflow
- Every client file shows the agreed fee, the amount paid and the outstanding balance side by side.
- The balance floors at zero, and any overpayment is surfaced separately as a credit rather than being absorbed.
- The dashboard totals the outstanding amount across every client, and the client list can be filtered to those that are not fully paid.