Accounts receivable aging,
Definition of Accounts receivable aging:
Money owed to a company by its debtors.
Accounts receivable aging, as a management tool, can indicate that certain customers are becoming credit risks, and may reveal whether the company should keep doing business with customers that are chronically late payers. Accounts receivable aging has columns that are typically broken into date ranges of 30 days, and shows total receivables that are currently due, as well as receivables that are past due.
Accounts receivable aging (tabulated via an aged receivables report) is a periodic report that categorizes a company's accounts receivable according to the length of time an invoice has been outstanding. It is used as a gauge to determine the financial health of a company's customers. If the accounts receivable aging shows a company's receivables are being collected much slower than normal, this is a warning sign that business may be slowing down or that the company is taking greater credit risk in its sales practices.
Process of determining which customers are paying on time, which are not, and how far they are behind the payment date. This analysis assists in estimating bad debts and in establishing credit guidelines.
How to use Accounts receivable aging in a sentence?
- Another selling point is the companys current $310,000 in accounts receivable (with payables of about $130,000).
- Accounts receivable aging is the process of distinguishing open accounts receivables based on the length of time an invoice has been outstanding.
- Accounts receivable aging is useful in determining the allowance for doubtful accounts.
- The aged receivables report tabulates those invoices owed by length, often in 30 day segments, for quick reference.
Meaning of Accounts receivable aging & Accounts receivable aging Definition