Monthly ageing of invoices

Analysing ageing periods can help you monitor your debtors and creditors, 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	1 Jul 10	123.45	21 days from Inv	22 Jul 10
A-Z Stationery	14 Jul 10	200.50	21 days from Inv	4 Aug 10
Chelsea Mosset	2 Jul 10	400.24	C.O.D.	2 Jul 10
Footloose Dance Studio	30 Apr 10	25.00	30 days from Inv	30 May 10
Footloose Dance Studio	12 May 10	112.30	30 days from Inv	11 Jun 10
Footloose Dance Studio	29 Jun 10	149.30	30 days from Inv	29 Jul 10
Footloose Dance Studio	30 Jun 10	20.35	30 days from Inv	30 Jul 10
Footloose Dance Studio	6 Jul 10	90.70	30 days from Inv	5 Aug, 10
Footloose Dance Studio	21 Jul 10	85.12	30 days from Inv	20 Aug 10
My Town Realty	26 May 10	210.45	7 days from EOM	7 Jun 10
My Town Realty	10 Jun 10	142.40	7 days from EOM	7 Jul 10

Ageing by invoice date using month names

Assume you age invoices monthly and identify your ageing 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
Ageing Percent	0.00	57.7%	20.0%	20.7%	1.6%

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

Ageing by invoice date using month numbers

Assume you identify your ageing 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
Ageing Percent	0.00	57.7%	20.0%	20.7%	1.6%

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

Ageing 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
Ageing Percent	0.00	24.1%	53.6%	20.7%	1.6%

 

Ageing 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
Ageing Percent	0.00	24.1%	53.6%	20.7%	1.6%