Accounts Receivable Aging


Accounts Receivable Aging
A periodic report that categorizes a company's accounts receivable according to the length of time an invoice has been outstanding. Accounts receivable aging is a critical management tool as well as an analytic tool that helps determine the financial health of a company's customers, and therefore the health of their business.

If an accounts receivable aging demonstrates that a company's receivables are being collected much slower than normal, this is a warning sign that business may be slowing down or that the company is taking greater credit risk in its sales practices.

As a management tool, accounts receivable aging may indicate that certain customers are not good credit risks. It can therefore help a company make prudent decisions about whether or not to keep doing business with customers that are chronically late payers.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Aging schedule — A table of accounts receivable broken down into age categories (such as 0 30 days, 30 60 days, and 60 90 days), which is used to see whether customer payments are keeping close to schedule. The New York Times Financial Glossary * * * aging… …   Financial and business terms

  • aging schedule — A table of accounts receivable broken down into age categories (such as 0 30 days, 30 60 days, and 60 90 days), which is used to determine if customer payments are keeping close to schedule. Bloomberg Financial Dictionary * * * aging schedule… …   Financial and business terms

  • aging of balances — The stratification of a balance sheet amount by either transaction or cash *settlement date. Balances for which aged analyses are prepared typically include *accounts receivable, inventory, and long term *loans. Aging is often used for management …   Auditor's dictionary

  • aging — A report or schedule of all outstanding accounts payable or accounts receivable that lists all account debtors or creditors by name, shows the total amount due to each debtor, and shows how much of the amount due to each debtor is due within… …   Financial and business terms

  • aging of accounts — Arranging the accounts (such as receivables or payables) in chronological order and grouping the accounts by intervals, such as accounts outstanding less than 30 days, 30 to 60 days, and so on. The process of classifying accounts receivable by… …   Black's law dictionary

  • aging of accounts — Arranging the accounts (such as receivables or payables) in chronological order and grouping the accounts by intervals, such as accounts outstanding less than 30 days, 30 to 60 days, and so on. The process of classifying accounts receivable by… …   Black's law dictionary

  • aging schedule —  A list of accounts receivable in order of how many days they are past due. The aging schedule is used by lenders when considering loans to businesses …   American business jargon

  • the aging —  A list of accounts receivable in order of how many days they are past due. The aging schedule is used by lenders when considering loans to businesses …   American business jargon

  • allowance for bad debts — A reduction in the value of *accounts receivable. One or more *general ledger accounts are used to record allowances for bad debts, which represent the value of accounts receivable whose ultimate collection is in doubt. The allowance may be for… …   Auditor's dictionary

  • account — A detailed statement of the mutual demands in the nature of debit and credit between parties, arising out of contracts or some fiduciary relation. A statement in writing, of debits and credits, or of receipts and payments; a list of items of… …   Black's law dictionary