Accounts Receivable Aging
A report categorizing receivables by time periods past due, helping companies assess collection risks and estimate potential bad debts.
Accounts Receivable Aging
A report that categorizes accounts receivable according to how long they have been outstanding, typically in 30-day increments (0-30 days, 31-60 days, etc.), helping companies manage collections and estimate uncollectible accounts.
For instance, a medical practice might prepare an aging report showing $50,000 in current receivables, $15,000 in 31-60 days, and $5,000 over 90 days, indicating that 7% of receivables may need additional collection efforts.
Aging reports serve as an early warning system for potential collection problems and provide a basis for estimating the allowance for doubtful accounts. They help management focus collection efforts on overdue accounts and evaluate the effectiveness of credit policies.