RECEIVABLES FINANCE GLOSSARY

Net receivables balance

DEFINITION

Net receivables balance is the value of a receivables pool after removing ineligible receivables and excess concentration from the gross balance. In trade receivables securitizations it is the base to which reserves and the funding formula apply, so it determines availability far more directly than the gross ledger balance does.

Applies to:Trade receivables securitizationReceivables purchase agreementsAsset-based lending

The number the whole structure hangs off

Almost every calculation in a trade receivables securitization references the net receivables balance. Reserves are expressed as a percentage of it. The loss horizon ratio divides by it. The funding test compares the amount outstanding to NRB less required reserves. If NRB is wrong, everything downstream is wrong, which is why lenders and field examiners spend most of their time on the walk from gross AR to NRB.

The walk from gross AR to NRB and the funding base

FROM LEDGER BALANCE TO FUNDING AVAILABILITY
Line	Amount
Gross accounts receivable	$50,000,000
Less: ineligible receivables (aging, disputes, affiliates, foreign)	($6,500,000)
Eligible receivables	$43,500,000
Less: excess concentration	($2,500,000)
Net receivables balance (NRB)	$41,000,000
Less: total reserves at 29.5% of NRB	($12,095,000)
Funding base	$28,905,000

In this example the company's ledger says $50 million but the facility will fund at most $28.9 million. Definitions matter: some agreements deduct excess concentration inside the eligibility step, others net it separately as shown here, and a few apply concentration limits to the balance net of other exclusions, which makes the order of operations part of the contract.

Why NRB moves when gross AR does not

An obligor drifting past its concentration limit converts eligible dollars into excess concentration with no change in total AR.
A customer crossing a cross-aging threshold flips its entire balance to ineligible at once.
Unapplied cash sitting on account overstates open invoices and can overstate NRB until it is applied.
Currency movements on foreign receivables change eligible values even when invoice counts are flat.

Olycor recomputes the full walk from gross AR to NRB every time data lands, using the exact order of operations in your agreement. Each deduction is decomposed to the invoice level, so when NRB drops $1.4 million between reports you can name the obligors and rules responsible in one click rather than one afternoon.

Frequently asked questions

Is net receivables balance the same as net AR on the balance sheet?+

No. Balance sheet net AR is gross receivables less the accounting allowance for doubtful accounts. NRB is a contractual funding concept: gross receivables less ineligibles and excess concentration as defined in the facility agreement. The two serve different purposes and rarely match.

Does NRB include or exclude reserves?+

In most trade receivables securitizations, reserves are applied to NRB rather than inside it. The typical funding test is that the amount outstanding must not exceed NRB multiplied by one minus total required reserves. Some documents phrase the same economics differently, so follow your agreement's defined terms.

How often should NRB be calculated?+

At minimum every reporting date, which is monthly in most securitizations and monthly or weekly in asset-based lending. Facilities with daily funding mechanics recalculate daily. More frequent calculation mostly benefits the borrower, because it surfaces availability swings before they collide with a draw request.

Know your NRB before you need to draw.

Olycor computes the walk from gross AR to net receivables balance deterministically, with every deduction traceable to specific invoices and rules.

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