Delay Rules
This article explains delay rules in Model Reef in more depth.
You will learn:
How numeric delays are interpreted by the timing engine.
How delays interact with model periodicity.
How delays create and unwind receivables and payables.
Delay rules are the link between accrual timing and cash timing.
Delay field basics
Each variable has a delay setting that tells Model Reef:
How long after the accrual date cash is received or paid.
Whether a receivable or payable should be created in the meantime.
Delays can be expressed as:
A number of days, for example
30 days,45 days,75 days.A number of weeks, for example
2 weeks,4 weeks.A number of months, for example
1 month,2 months.
The timing engine uses these to schedule cash movements in calendar time, then aggregates them into model periods.
Mapping delays to model periods
Model Reef is aware of dates, even if the model uses monthly or quarterly periods.
When you specify a delay:
The engine calculates the exact date by adding the delay to the accrual date.
It then determines which model period that date falls into.
Cash is allocated to that period, not necessarily the immediately following one.
Example for a monthly model:
Revenue accrues on 1 March.
Delay is 75 days.
75 days after 1 March falls in mid May.
Cash from that accrual appears in the May period.
Accounts Receivable holds the value between March and May.
This allows you to use real world payment terms without guessing period boundaries.
Zero delay vs positive delay
Two important cases:
Zero delay
Cash and accrual occur in the same period.
No receivable or payable is created.
Useful for cash sales, immediate card payments, and many small expenses.
Positive delay
Accrual happens first, cash later.
Receivables or payables bridge the gap.
Useful for credit sales, supplier terms, tax instalments and many project based arrangements.
You can mix zero and positive delay variables in the same model to reflect different payment behaviours.
Delay rules for different variable types
Delay behaviour by type:
Revenue
Delay creates Accounts Receivable.
Receivable decreases when the delay expires and cash is collected.
COGS, Opex and Staff
Delay creates Accounts Payable.
Payable decreases when the delay expires and cash is paid.
Tax
Payment frequency and lag create Tax Payable between expense and payment.
Interest
Lag between interest expense and interest paid creates Interest Payable.
Assets, Liabilities, Equity and Dividends
Typically use explicit capex, drawdown, repayment or distribution schedules rather than generic delays.
The same accrual first, cash second principle applies throughout.
Changing delays and their effect
If you change a delay:
The model recalculates which periods receive cash.
Receivable or payable balances are recomputed.
Working capital and cashflow lines update.
P&L accruals are not changed (timing of performance remains the same).
This lets you test scenarios such as tighter collections or extended supplier terms by editing a single field.
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