Purpose of the Report
The Open Receivables Analysis report is a critical tool used by businesses to evaluate and manage outstanding customer invoices and receivables. It provides a detailed breakdown of current outstanding balances, overdue amounts, aging of invoices, and customer payment behaviors. This report aids in understanding the financial health of accounts receivable and assists in strategizing collection efforts.
Key Metrics Explained
- Balance Remaining Amount: This represents the total amount of outstanding receivables that are yet to be settled by customers.
- Before Due Amount: The amount of receivables that are still within the payment due period and have not yet become overdue.
- Overdue Amount: The sum of receivables that have surpassed their due date and are yet to be paid by customers.
- Overdue Ratio: This is the percentage ratio of the total overdue amount to the total balance remaining amount, indicating the proportion of overdue receivables in relation to the overall outstanding balance.
- Open Entry Customers: The count of unique customers with outstanding balances.
- Overdue Customers: The number of customers who have overdue invoices.
- No. of Documents: Total number of outstanding documents (e.g., invoices, credit notes) related to the receivables.
- No. of Invoices: The total count of outstanding invoices.
- Overdue Documents: Number of documents (e.g., invoices) that are past their due date.
- Overdue Invoices: Count of invoices that are overdue.
Receivables Aging
Receivables aging refers to the categorization of outstanding receivables based on the number of days past their due date. This analysis helps businesses understand the distribution and age profile of their unpaid invoices:
Before Due:
- 0-30 days
- 31-60 days
- 61-90 days
- 91-120 days
- 121-150 days
- 151-180 days
- 181-365 days
- 1-2 years
- >2 years
Overdue:
- 1-30 days overdue
- 31-60 days overdue
- 61-90 days overdue
- 91-120 days overdue
- 121-150 days overdue
- 151-180 days overdue
- 181-365 days overdue
- 1-2 years
- > 2years
By categorizing receivables into these aging groups, businesses can assess the level of delinquency and prioritize collection efforts accordingly. It allows finance teams to identify which invoices are becoming significantly overdue and take appropriate actions to recover these outstanding amounts.
The Open Receivables Analysis is a comprehensive report that aids finance and credit management teams in tracking and managing outstanding receivables effectively. By monitoring metrics such as overdue amounts, aging profiles, and customer behaviors, businesses can optimize cash flow, minimize credit risks, and maintain healthy customer relationships. This report serves as a critical tool in financial decision-making and accounts receivable management strategies.