Accounting
Total Receivables
Total amount receivable from invoices, both overdue and current due.
Explanation of metric
Total receivables represent the final amount to be received from all invoices, combining both overdue invoices (those that have crossed the payment due date) and current invoices (those that have not yet crossed the payment due date).
How it's measured
Total Receivables = Receivables Current Due + Receivables Overdue
Reading
An increase in this metric is unfavorable as it indicates that more payments are pending, either overdue or approaching their due date, which can negatively impact cash flow.
Interpretation
This is the total value that your customers owe, encompassing both overdue and current invoices.
This metric provides insight into the total value that your customers owe, including both overdue and current invoices. An increase in this metric may indicate inefficiencies in your payment collection process for overdue and current invoices. Higher total receivables can negatively impact your cash flow and signal an increased risk of customer churn. If the total receivables are high, it's important to review your payment terms, dunning processes, and collection strategies to mitigate this issue.
Example
In a given period: Receivables Current Due = $5,000 Receivables Overdue = $2,000 Total Receivables = $5,000 + $2,000 = $7,000
Total Receivables - Current Due
The Total Receivables—Current Due metric measures the amount receivable for invoices that have not reached the payment due date.
Explanation of metric
This metric represents the total amount to be received for invoices that are still within their payment terms and have not yet passed the due date. It helps understand the current state of accounts receivable that are expected to be collected on time, providing insights into the effectiveness of current credit terms and payment behavior.
How it's measured
Total Receivables - Current Due = Sum (Amount that is due of all the invoices with status = ‘POSTED')
Reading
An upward trend in Total Receivables - Current Due indicates an increase in outstanding payments within their due date, which could be a warning sign if it significantly impacts cash flow.
Interpretation
The Total Receivables—Current Due metric is crucial for understanding the total amount that customers owe within their payment terms. Monitoring this metric helps assess potential cash flow and plan for future financial needs. If this metric increases significantly, it may be necessary to evaluate and adjust payment terms to ensure timely collections and maintain healthy cash flow.
Total Receivables - Overdue
The total amount receivable from invoices that have crossed their payment due date.
Explanation of metric
This metric represents the outstanding amount from overdue invoices—those that remain unpaid after the due date. Monitoring this metric helps businesses understand the portion of revenue that is at risk due to delays in customer payments.
How it's measured
Total Receivables Overdue = Sum (Amount that is due of all the invoices with status in 'NOT_PAID', 'PAYMENT_DUE')
Reading
An upward trend is undesirable as it signals an increase in overdue receivables.
Interpretation
A high or increasing Total Receivables - Overdue may indicate inefficiencies in payment collection. It also raises the risk of customer churn, as overdue payments can strain customer relationships. To mitigate this risk, consider adjusting dunning settings to improve online payment follow-up or revising collection processes for offline payments. Timely actions in these areas can help reduce overdue receivables and improve cash flow stability.
Receivables Aging Summary
This metric indicates the total amount due and the number of unpaid invoices across all outstanding invoices categorized by the aging interval.
Explanation of metric
The Receivables Aging Summary provides an overview of the outstanding invoices categorized by aging buckets. It helps you analyze the distribution of outstanding balances and identify overdue payments.
How it's measured
The aging interval is the difference in days between the chosen time period and the due date of the invoice.
Amount due = Sum (Amount that is due of all the invoices with status in 'NOT_PAID', 'PAYMENT_DUE', 'POSTED')
Number of invoices = Number of invoices that fall under the above category and contribute to the aging balance.
Reading
The Receivables Aging Summary metric does not show a discernible upward or downward trend. This metric typically provides a snapshot of outstanding invoices and categorizes them based on the length of time they've been overdue.
Interpretation
The Receivables Aging Summary is an important metric for monitoring the collection performance and identifying potential cash flow issues. It helps you understand the average due period of your account receivables and prioritize collection efforts accordingly. A higher amount in older aging buckets (e.g., 61+ days) may indicate issues with customer payment behavior or the need to improve your credit policies. Focusing on the aging buckets with the highest amounts due can help prioritize collection efforts and reduce the risk of bad debt.
Example
In a given period, the A/R Aging Report shows:
0-30 Days: $10,000 (20 invoices)
31-60 Days: $4,000 (8 invoices)
61-90 Days: $1,500 (5 invoices)
90+ Days: $500 (2 invoices)
Based on the aging timeline, you can track overdue payments and assess the effectiveness of your collection process.
Receivables Aging Summary by Customer
Receivables Aging Summary by Customer indicates the total amount due on all outstanding invoices for each customer based on the selected aging interval.
Explanation of metric
The Receivables Aging Summary by Customer tracks overdue payments from customers, allowing you to see how much is owed and for how long. The aging intervals typically include 0-30 days, 31-60 days, 61-90 days, and more than 90 days. This helps businesses prioritize follow-ups on overdue payments and manage collections efficiently.
How it's measured
The aging interval is the difference in days between the chosen time period and the customer's due date for the invoice segmented by customer.
Amount due = Sum (Amount that is due of all the invoices with status in 'NOT_PAID', 'PAYMENT_DUE', 'POSTED') segmented by customer.
Number of invoices = The number of invoices that fall under the above category and contribute to the aging balance segmented by customer.
Reading
Each customer's outstanding balance is displayed in the corresponding aging category. The metric provides a summary of amounts due, segmented by the number of days overdue.
Interpretation
Use this metric to monitor customer payment behavior, identify overdue payments, and assess the risk of delayed cash inflows. High amounts in the longer aging intervals (e.g., 90+ days) may indicate potential collection issues.
Example
Customer A has $5,000 in outstanding invoices:
- $2,000 aged 0-30 days
- $3,000 aged 31-60 days
Customer B has a total of $7,500 outstanding:
- $1,500 aged 61-90 days
- $6,000 aged 90+ days
The larger, older unpaid amount helps the business prioritize collections for Customer B.
Account Receivable - Summary
Total amount receivable from invoices, both overdue and current due.
Explanation of metric
Total receivables represent the final amount to be received from all invoices, combining both overdue invoices (those that have crossed the payment due date) and current invoices (those that have not yet crossed the payment due date).
How it's measured
Account Receivable - Summary = Receivables Current Due + Receivables Overdue
Reading
An increase in this metric is unfavorable as it indicates that more payments are pending, either overdue or approaching their due date, which can negatively impact cash flow.
Interpretation
This is the total value that your customers owe, encompassing both overdue and current invoices.
This metric provides insight into the total value that your customers owe, including both overdue and current invoices. An increase in this metric may indicate inefficiencies in your payment collection process for overdue and current invoices. Higher total receivables can negatively impact your cash flow and signal an increased risk of customer churn. If the total receivables are high, it's important to review your payment terms, dunning processes, and collection strategies to mitigate this issue.
Example
In a given period: Receivables Current Due = $5,000 Receivables Overdue = $2,000 Account Receivable - Aging = $5,000 + $2,000 = $7,000
Account Receivable - Aging
This metric indicates the total amount due categorized by the aging interval.
Explanation of metric
The Account Receivable - Aging provides an overview of the outstanding amount due categorized by aging buckets. It helps you analyze the distribution of outstanding balances and identify overdue payments.
How it's measured
The aging interval is the difference in days between the chosen time period and the due date of the invoice.
Amount due = Sum (Amount that is due of all the invoices with status in 'NOT_PAID', 'PAYMENT_DUE', 'POSTED')
Reading
The Account Receivable - Aging metric does not show a discernible upward or downward trend.
Interpretation
The Account Receivable - Aging is an important metric for monitoring the collection performance and identifying potential cash flow issues. It helps you understand the average due period of your account receivables and prioritize collection efforts accordingly. A higher amount in older aging buckets (e.g., 61+ days) may indicate issues with customer payment behavior or the need to improve your credit policies. Focusing on the aging buckets with the highest amounts due can help prioritize collection efforts and reduce the risk of bad debt.
Example
In a given period, the A/R Aging Report shows:
0-30 Days: $10,000
31-60 Days: $4,000
61-90 Days: $1,500
90+ Days: $500
Based on the aging timeline, you can track overdue payments and assess the effectiveness of your collection process.
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