Monthly aging of invoices

Analyzing aging periods can help you monitor your receivables and payables, including tracking due dates for invoices and overdue payments.

For example, assume you have the following invoices:

 

Customer	Date	Amount	Terms	Due
A-Z Stationery	Jul 1, 10	123.45	21 days from Inv	Jul 22, 10
A-Z Stationery	Jul 14, 10	200.50	21 days from Inv	Aug 4, 10
Chelsea Mosset	Jul 2, 10	400.24	C.O.D.	Jul 2, 10
Footloose Dance Studio	Apr 30, 10	25.00	30 days from Inv	May 30, 10
Footloose Dance Studio	May 12, 10	112.30	30 days from Inv	Jun 11, 10
Footloose Dance Studio	Jun 29, 10	149.30	30 days from Inv	Jul 29, 10
Footloose Dance Studio	Jun 30, 10	20.35	30 days from Inv	Jul 30, 10
Footloose Dance Studio	Jul 6, 10	90.70	30 days from Inv	Aug 5, 10
Footloose Dance Studio	Jul 21, 10	85.12	30 days from Inv	Aug 20, 10
My Town Realty	May 26, 10	210.45	7 days from EOM	Jun 7, 10
My Town Realty	Jun 10, 10	142.40	7 days from EOM	Jul 7, 10

Aging by invoice date using month names

Assume you age invoices monthly and identify your aging periods by month names. If you age these invoices by invoice date using any date in July 2010, the invoices will be aged as follows.

 

	Total	July	June	May	Pre-May
A-Z Stationery	323.95	323.95	0.00	0.00	0.00
Chelsea Mosset	400.24	400.24	0.00	0.00	0.00
Footloose Dance Studio	482.77	175.82	169.65	112.30	25.00
My Town Realty	352.85	0.00	142.40	210.45	0.00
Totals	1,559.81	900.01	312.05	322.75	25.00
Aging Percent	0.00	57.7%	20.0%	20.7%	1.6%

In the example above, each aging period represents the month in which the invoice became due.

Aging by invoice date using month numbers

Assume you identify your aging periods by month numbers. The results above would be the same, but with different headings, as follows:

 

	Total	1 Month	2 Month	3 Months	3+ Months
A-Z Stationery	323.95	323.95	0.00	0.00	0.00
Chelsea Mosset	400.24	400.24	0.00	0.00	0.00
Footloose Dance Studio	482.77	175.82	169.65	112.30	25.00
My Town Realty	352.85	0.00	142.40	210.45	0.00
Totals	1,559.81	900.01	312.05	322.75	25.00
Aging Percent	0.00	57.7%	20.0%	20.7%	1.6%

In this example, each aging period represents the number of months by which the invoices assigned to the period are overdue.

Aging by month name using invoice terms

If you were to age the transactions based on their invoice terms, the results would be similar; however, your report would show the month in which the invoice falls due.

 

	Total	Current	July	June	Pre-June
A-Z Stationery	323.95	200.50	123.45	0.00	0.00
Chelsea Mosset	400.24	0.00	400.24	0.00	0.00
Footloose Dance Studio	482.77	175.82	169.65	112.30	25.00
My Town Realty	352.85	0.00	142.40	210.45	0.00
Totals	1,559.81	376.32	835.74	322.75	25.00
Aging Percent	0.00	24.1%	53.6%	20.7%	1.6%

 

Aging by month number using invoice terms

If you were to age the example transactions based on their invoice terms and using month numbers, the results would look like this:

 

	Total	Current	1 Month	2 Months	2+ Months
A-Z Stationery	323.95	200.50	123.45	0.00	0.00
Chelsea Mosset	400.24	0.00	400.24	0.00	0.00
Footloose Dance Studio	482.77	175.82	169.65	112.30	25.00
My Town Realty	352.85	0.00	142.40	210.45	0.00
Totals	1,559.81	376.32	835.74	322.75	25.00
Aging Percent	0.00	24.1%	53.6%	20.7%	1.6%