AR/AP aging

Two reports that show who owes you money and who you owe, grouped by how overdue each amount is. AR aging is money coming in (customer invoices). AP aging is money going out (bills you have to pay). Together they are the backbone of a cash-flow forecast.

What it is

An aging report buckets each unpaid invoice or bill by age: current, 1-30 days late, 31-60, 61-90, over 90. AR (accounts receivable) aging is your customers' unpaid invoices. AP (accounts payable) aging is your unpaid vendor bills. The buckets tell you what is likely to land in the bank, and what is about to leave it, and when.

Why CEOs care

Because your accounting software shows you the past, but a cash-flow forecast you can trust is built forward from these two reports plus your payment assumptions. Hand AI your AR and AP aging and it can model a rolling 13-week cash view and answer "what happens if our biggest customer pays 30 days late." The forecast is only as honest as the aging data and the assumptions you give it.

Where you'll see it

At the heart of the cash-flow-forecast workflow, as the export you feed the model.

Example

A founder exports AR and AP aging plus the current bank balance, gives AI the recurring inflows and outflows, and gets back a 13-week cash table to stress-test before payroll.

Related

• general-ledger
• cash-vs-accrual