Glossary
What is Receivables ageing?
A receivables ageing report groups the amounts customers owe by how long they have been outstanding, for example up to 30 days, 31 to 60 days, 61 to 90 days and over 90 days. It shows which dues need chasing and where bad-debt risk is building.
A receivables ageing report answers one question: of everything customers owe you, how much is late, and by how long. It breaks a single outstanding total into bands, so the oldest dues get attention first.
How it works in practice
Take, as an example, a building-materials supplier in Bhaktapur with Rs 8,40,000 owed across forty contractors. Sorted by age, it reads: Rs 4,10,000 within 30 days, Rs 2,20,000 at 31 to 60 days, Rs 1,30,000 at 61 to 90 days and Rs 80,000 over 90 days.
The total looks manageable. The bands say otherwise: Rs 2,10,000 is more than two months old, and two contractors account for most of the oldest band. Those two get a phone call this week, a statement of account listing every open bill, and no further credit until they pay something.
Decide whether you count age from the invoice date or from the due date set by the payment terms, and keep to it. Counting from the due date shows what is actually overdue rather than merely old.
Common mistakes
- Receipts not applied to the invoices they settle. A payment that is not linked to an invoice leaves old bills looking unpaid and newer ones looking cleared.
- Credit notes for returned goods not recorded, so a customer appears to owe more than they do.
- Reading the total instead of the oldest band.
- Running it once a quarter. Weekly catches a slipping customer while the amount is still small.
When it is not worth it
A shop that sells almost entirely for cash, with a few trusted regulars on udhaaro, can follow them in a customer ledger without bands. The report also collects nothing by itself: it tells you whom to call, and credit limits decide who should not get more.
Kuver Books does not produce ageing bands on receivables. Its accounts receivable ledger lists every unpaid invoice with its due date, status and balance, and exports exactly as filtered, so bands can be built in a spreadsheet; see accounts receivable in the help centre.
Glossary
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