In plain words
There are two: AR aging lists what customers owe you, AP aging lists what you owe vendors. Each one sorts the open items into columns by age.
Read the right-hand columns first. An invoice 90 days late is far less likely to be paid than one 10 days late, so that is where follow-up time pays off.
Example
An AR aging, summarized
Current$12,400
1 to 30 days late$3,100
31 to 60 days late$4,200
61 to 90 days late$0
Over 90 days$850
Example figures, not a real company. The $850 is where to call first.
In our model
agentsperson
Agents keep the report current and send reminders. Your person decides who gets a call and what gets written off.
Agents keep the report current and send reminders. Your person decides who gets a call and what gets written off.