Aged account receivable report
What is an aged account receivable report
An aged accounts receivable report is a financial document that shows the amount of money that a business is owed by its customers, organized by how long the invoices have been outstanding. The report typically includes columns for the invoice date, due date, and the number of days past due, and is used to help a business track and manage its outstanding receivables. It can help identify which customers are consistently paying late and prioritize collection efforts.
Why is this important to a lender
Aged accounts receivable reports are important to lenders because they provide insight into a business's ability to collect payment from its customers. A lender can use this information to assess the creditworthiness of a business and its ability to repay a loan.
If a business has a high amount of outstanding receivables that are past due, it may indicate that the business is having difficulty collecting payment from its customers. This could be a sign of financial trouble and a risk for the lender. On the other hand, if a business has a low amount of past due receivables, it may indicate that the business is effectively managing its accounts receivable and has a strong ability to repay a loan.
Additionally, the lender can use the information in the report to evaluate how well the business manages its credit and how it handles past due accounts. This information can help the lender to decide whether to approve a loan, and at what terms.
How to prepare this document
You can access a copy of an aged accounts receivable report by using accounting software or by creating the report manually.
If you are using accounting software, such as QuickBooks or Xero, you can usually generate the report directly from the software. The process will vary depending on the specific software you are using, but typically you can access the report by going to the "Reports" or "Financial Statements" section of the software and selecting the "Aged Accounts Receivable" report.
If you are not using accounting software, you can create an aged accounts receivable report manually by gathering all of your unpaid invoices and organizing them by how long they have been outstanding. You can then calculate the total amount due for each time period (e.g. 0-30 days, 31-60 days, 61-90 days, etc.) and create a report that shows the total amount due for each time period.
It is important to note that the Aged Accounts Receivable report is a part of the overall financial statements of a company and is usually prepared by the bookkeeper or accountant of the company. If you are not able to access this document, consider consulting your accountant or bookkeeper.