As we approach the end of the calendar year, financial reporting is a top priority and accounts receivable reporting is a critical piece of the puzzle. Of course, accounts receivable aging reports are going to be that much more important as businesses attempt to close the year with the least amount of outstanding credit issued. So, let’s look at receivables aging reports, why they’re so important and how you can simplify your reporting.
What Is an Accounts Receivable Aging Report
In the simplest terms, an accounts receivable aging report is a list of all your unpaid customer invoices and credit notes compiled by date range. It is common to use 30-day intervals on an aging receivables report with a column listing unpaid invoices for the last 30 days, another column listing the previous 30-day period and so on.
Why Receivables Aging Reports are Important
An AR aging report is important because it is a primary tool used in a business’s collection efforts and is vital to improving your accounts receivable turnover ratio. Receivables aging reports help to identify overdue customer payments and prioritize them for collections. It may also be a key indicator of your company’s ability to issue credit and collect, and it may indicate which customers are consistently falling behind on their payments. Lastly, it gives you a snapshot of your outstanding revenue and can impact decision making and financial planning.
How Automation Can Help
Collecting receivables is a costly endeavor for any business and can cause major headaches, especially for SMBs. With accounts receivable automation software you can streamline your receivables tasks with automatic payment reminders to your customers, online payment portals and improved data insights. Learn more: 7 receivables automation functions to get paid faster and reduce collections costs
However, not every AR automation solution includes support for receivables aging reporting. When selecting AR automation software, it is critical to choose a solution that supports aging reports to simplify reporting and ensure you are getting the most accurate and timely data possible.
If you are a Microsoft Dynamics GP user and you’re still just getting by with GP’s built-in AR features, Fidesic AR can help you turbo charge your reporting and collections efforts so can get paid faster and reduce your collections overhead. Learn More