Several financial reports are available on semilimes. An aged balance report is one of the most crucial reports because it provides a snapshot of all incoming and outgoing payments that are due. It also helps you to track which companies are lagging behind with their scheduled payments.
Accounts receivable or payable is generated when a company purchases and sells goods or services on credit. For example: a company may have an agreement with its suppliers to pay for goods or services 30 days after they are received. On the other hand, it can have a deal with the customer to pay instantly for the goods and services delivered. In order to meet monthly operating costs, a steady revenue stream (and system) is essential. The aged balance report will facilitate your understanding of which companies are regular and on-time with their payments and which may be lagging behind. If you are unable to stay abreast of these factors, you will not be able to maintain a healthy cash flow.
An aged balance report shows the outstanding invoices based on specified date ranges. Let’s consider the example below:
ABC Company Limited is a customer who purchases products from your company. You created an invoice of $10,000 USD against sales and the invoice date was January 28. The payment term for the invoice was ‘Net 15 days from invoice date’. Therefore, the invoice will become due on February 12th. So, if you generate the aged balance report on the 12thof February then the invoice amount will be displayed on the ‘current’ column because it has exceeded the agreed upon 15 days from the invoice date. Before the 12thFebruary the amount would not be displayed in any columns of the report.
Once 30 days has passed from the date of 12thFebruary, the invoice amount will be displayed on the ‘First term’ column as below. Therefore, if you generate the report on 14thMarch then the report will be displayed as –
Similarly, the invoice amount will shift to the next column if we generate the report 30 days after March 14th.
In order to access the aged balance report on semilimes, go to the ‘Financial’ menu and click on ‘Reporting’. Click ‘Aged Balance’ from the ‘Reporting’ sub-menu. It will then display the aged balance report which contains the following columns:
- Party name – this column shows the party name that has due invoices.
- Now – this column shows the total amount of the invoices that are due but that have not crossed the number of days/month set in the first term.
- First term – this column shows the total amount of the invoices due for the number of days/months set in the first term, but that have not crossed the number of days/months set in the second term.
- Second term - this column shows the total amount of the invoices due for the number of days/months set in the second term, but have not crossed the number of days/months set in the third term.
- Third term - this column shows the total amount of the invoices due for the number of days/months set in the third term.
- Balance – this column shows the total amount of the invoices that are due for the selected date.
You can check the aged balance report by using different parameters available in the ‘Report Settings’. Below you will see what happens when you click on the ‘Report Settings’ option -
- Select the date for which you want to see the aged balance report. Based on the selection of the date, the aged balance report will show the amount for the invoices due in different columns.
- Your company will be selected by default.
- If you want to see the aged balance report only for the posted invoices, then you need to switch on the ‘Posted Move’ slider. By default, it is switched off, which means the report will consider both posted and non-posted invoices.
- You can select both customers and suppliers if you want to see the aged balance report for both supplier and customer invoices. You have the option to generate the report only for customers or suppliers as well.
- You can either choose days or months to set the terms for the report. For example: if you select ‘days’ then you need to set the number of days on each term.
- Enter the number of days for the first term. For example, if you set 30 days in the first term then the invoices due for more than 30 days will be displayed on the first term column.
- Enter the number of the days for the second term. For example, if you set 60 days in the second term, then the invoices due for more than 60 days will be displayed on the second term column.
- Enter the number of the days for the third term. For example, if you set 90 days in the third term then the invoices due for more than 90 days will be displayed on the third term column.
Once you are done by setting the parameters click the ‘OK’ icon. The aged balance report will show the data based on the settings.
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