Accounts Receivable Reporting
Accounts receivable reporting is the process of generating and analyzing reports that provide insights into a company’s accounts receivable balances and activities. The reports can be used by management and stakeholders to understand the financial position of the business, identify potential issues with collections, and make informed decisions related to cash flow and credit policies.
Types Of Accounts Receivable Reports
- Aging Report: Aging report helps companies track how long their accounts receivable balances have remained unpaid. It sorts customer balances based on the time interval since the invoice was raised, typically ranging between 30, 60, and 90 days. The aging report can reveal cash flow problems and identify clients with lengthy outstanding invoices.
- Invoice Aging Summary: Invoice Aging Summary report displays the total outstanding amount along with the age of the invoices. It helps to prioritize which invoices to follow up on first, based on their age and outstanding balance
- Customer Aging Summary: Customer Aging Summary is a report that shows the total outstanding balance of each customer based on the aging of their invoices. This report can help identify customers who consistently delay payments.
- Open Invoice Report: Open Invoice Report provides detailed information on all open and unpaid invoices from each customer. It displays the invoice number, date, due date, invoice amount, and balance.
- Sales Report: Sales Report shows the total sales of the business within a specific time frame. It categorizes sales by product or service, making it easy to identify the most profitable products or services.
- Collections Report: Collections Report shows the efforts of the company to collect any outstanding amounts, and it highlights the status of each account, whether it’s current or delinquent. It helps track the effectiveness of the collections process.
- Bad Debt Report: Bad Debt Report shows the receivables that are unlikely to be collected and need to be written off as bad debts. It helps to identify potential losses and take appropriate action to mitigate them.
- Cash Flow Forecast Report: Cash Flow Forecast Report provides an estimate of the expected cash inflows from accounts receivable for a specified period. It helps to forecast cash flow and plan for future expenses and investments.
- Account Reconciliation Report: Account Reconciliation Report compares the accounts receivable balance in the general ledger with the balance in the accounts receivable sub-ledger. It helps to ensure the accuracy of the accounts receivable balance and identify any discrepancies that need to be corrected.
This financial metric offers valuable information regarding the financial state and stability of a company by analysing the performance of its sales teams, customer behaviour, and overall cash-flow management. The reports generated through AR reporting are used to assess a company’s credit policies, potential risks of bad debts, and the performance of their collection departments.
These reports offer a comprehensive view of the amount receivable from different customers, the aging of those receivables, and the breakdown of invoices by their various stages of processing, i.e., outstanding, overdue or paid. This information helps companies to make informed decisions about the appropriate actions they need to take in order to minimize the risk of default, such as offering early payment discounts, improving debtor management processes, or engaging a collections agency.
AR reporting can also be used by companies to track their progress towards financial goals, identify areas where they need to improve, and create forecasts for cash flow management.