Daily and Weekly Aged Debtor Analysis

What is Daily and Weekly Aged Debtor Analysis?

Accounts receivable aging is the process of calculating and comparing the debts your company is owed based on how long it takes creditors to pay them. This number is typically expressed in days or weeks.

Closely monitoring these rates is a good way to evaluate the financial health of your customers and optimize your accounts receivable practices. If it takes your business longer than usual to get paid, you may need to rethink existing credit practices.

This formula can help your business get a better understanding of its accounts receivable:

Daily and weekly aged debtor analysis = (trade receivables/sales in annual credit) x 365 days or 52 weeks

Related terms

30-Day and 13-Week Operating Cash Burn

30-day and 13-week operating cash burn are also known as the “burn rate.” These are the rates at which a business consumes its cash reserves when it isn’t bringing in profit.

ASC 606

Accounting Standards Codification (ASC) 606 is a standard framework for revenue recognition developed by the Financial Accounting Standards Board (FASB) for companies operating within the United States.

Account Reconciliation

Account reconciliation is the process of comparing two sets of records to ensure their accuracy and consistency.

Accounts Payable

Accounts payable (AP) refers to the amount of money that a business owes to its suppliers or creditors for goods or services purchased on credit.

Accounts Payable Days

Accounts Payable Days (AP Days), also referred to as Days Payable Outstanding (DPO), is a financial ratio that measures the average time a company takes to pay its suppliers or vendors for credit purchases.

Accounts Payable Turnover

Accounts payable turnover explains how many times a business pays its creditors in a set timespan. Companies can use this metric to measure their short-term liquidity.