Aged Debt Analysis

Aged debt analysis, often called an accounts payable aging report, is a list of all accounts-payable accounts, the balances owed and the number of days each bill is outstanding. It is typically created in a graph-style form.

Purpose

Aged debt analysis reports are typically created on a six- or eight-column ledger or graph. They are used to alert company managers of the status of all money owed, when it is due and if it is overdue. It helps companies increase their cash flow by paying debts on the latest date possible. This gives companies the ability to hold their money longer by managing their finances more efficiently.

Accounts

A typical aged debt analysis contains a listing of each accounts payable company name in the first column of the report. The second column is used for placing the total outstanding dollar amount owed to each vendor.

Columns

The next four columns separate the outstanding debts into the days the bill is outstanding. The first column lists all amounts that are current or not yet due. The next column lists all debts that are between one and 30 days past due. The third column lists the debts that are between 31 and 60 days past due, and the final column lists all debts more than 60 days past due. Some companies may extend the ledger to include a column for debts that are 61 to 90 days past due and a column for debts that are more than 90 days past due.

References

• Commerce Dictionary: Aged Debtors Analysis
• Salford: Analysis of Debt Outstanding
• Business Owner's Toolkit: Accounts Payable Aging Schedule