What is accounts aging?
Want to know when your invoices are going to be paid? Looking for a way to predict your future income? Your wait is over! Accounts aging is the report you need today, to tell you what you are going to get paid tomorrow (well, not quite – but it does help!).
The accounts aging report is now displayed in the home tab of your Invoiceplace account, and is a useful and easy way for you to see total invoice payments due in the future.
The report uses the invoice due date, and calculates the total amount due by month. For example if you create an invoice in August for $100 that is due to be paid in September, the accounts aging report will show $100 due to be paid in September.
If your customer makes an early payment of $50 for this invoice, $50 will then be displayed for September. This means the accounts aging report does not show any payments you have received but will adjust accordingly to reflect the amount due.
The accounts aging includes multi-currency billing support, so if you have invoices for $50 in US Dollars and $100 in Canadian dollars both due in September these total amounts will be listed separately.
If you delete or change an invoice total, due date or the receipt amount or payment date the accounts aging will be automatically adjusted as required.
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Cladia wrote:
Classifying accounts by the time elapsed after the date of billing or the due date. The longer a customers account remains uncollected or the longer inventory is held, the greater is its realization risk. If a customers account is past due, the company also has an Opportunity Cost of funds tied up in the receivable that could be invested elsewhere for a return. An aging schedule of accounts receivable may break down receivables from 1 to 30 days, 31 to 60 days, 61 to 90 days, and over 90 days. With regard to inventory, if it is held too long, obsolescence, spoilage, and technological problems may result. Aging can be done for other accounts such as fixed assets and accounts payable.
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Cladia
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Posted on 11-Nov-08 at 3:13 pm | Permalink