What is Receivables/ Aging in Revenue Story?

Modified on: Mon, 30 Aug, 2021 at 10:10 AM

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.

Click here to know about other metrics.

M
Monica is the author of this solution article.

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