This metric displays the amount of unpaid invoices grouped according to the number of days past the due date.
Explanation of metric
A table breaking down the amount due for all overdue invoices grouped into multiple time buckets such as 1-30 days, 31-60 days, and so on based on the due date.
How it's measured
Account Receivables Aging = [(Total amount of overdue invoices segmented by overdue period)]Note: Only the first Activation date is considered. Subsequent reactivations are not considered.
Reading
Down: Good
Interpretation
- This metric helps estimate potential bad debts and acts as a gauge to determine the financial health of a company. Also helps in estimating future cash flows.
- Example:
30 day overdue: $200K,
31-60 day overdue: $100K,
61-90 day overdue: $300K and so on.
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