From keeping a track of invoices, to getting paid faster and identifying issues, find out why your business should get AR aging reports.
Did you know that an accounts receivable aging report (AR) is an important tracking mechanism for cash flow planning? Yes, it is true. An AR report is like a snapshot of which clients are in good standing and which have been irresponsible with their bills. An AR report can help you keep a tab on the pulse of your cash flow.
Getting an assessment of which clients are not paying their bills on time can alert you to other underlying issues and help you address them.
A late payment can be a warning sign for a client’s dissatisfaction with products/services, financial instability, a problem with the relationship, problems with invoicing or other such serious problems.
What does an AR aging report include?
Generally, an AR aging report would feature the total amount owned by a client and will follow up with a breakdown into aging categories like 30-60 days or 60-90 days. Although different accounting applications can be used to create an AR report, the categories of an AR report will always be in a 30-day segment. An AR report will usually include the following: