Accounts Receivable Aging Report: Definition, Calculation, and Benefits
Do you feel like a hamster on a wheel, always chasing payments and worrying about cash flow? Are you frustrated by inaccurate invoicing, payment delays, and struggling to collect outstanding balances? Relax! We've got the solution for you!
The accounts receivable aging report is a tool that can help you manage your finances better. In this blog, we'll explain what accounts receivable aging is, how to calculate it, and outline the benefits of using this report.
Table of Content:
Definition of Accounts Receivable Aging Report
Accounts receivable aging provides a clear snapshot of the outstanding invoices by age. This report breaks down your invoices into categories based on how long they've been due. For example, 0-30 days old invoices would be in one category, while 31-60 days old invoices would be in another.
The accounts receivable aging report is used to track and manage cash flow. It also helps detect late-paying clients and can reveal invoicing or collection issues.
Calculation of Accounts Receivable Aging
To calculate the accounts receivable aging report, you'll need to organize your outstanding invoices by their age. Here's an example breakdown:
Invoices that are 0-30 days old: $50,000
Invoices that are 31-60 days old: $10,000
Invoices that are 61-90 days old: $5,000
Invoices that are over 90 days old: $2,000