There are many concepts in the field of health management that need to be understood in order to most efficiently and properly run a health care institution and to maximize patient satisfaction and quality of health care provided. One of these important concepts is the accounts receivable aging report. An accounts receivable aging is a report that details unpaid customer invoices and unused credit memos by date ranges. Collection personnel use the aging report as the primary tool to determine which invoices are overdue for payment. The report may also be configured to hold contact information for each customer, with its use as a collection tool. Read on to learn more about account receivable aging and its applications. Health Management Solutions, Inc. provides premium health care administration consultation. Call Health Management Solutions, Inc. today for your consulate health care needs!
What Information It Holds And What It Is Used For
Management is able to utilize an accounts receivable aging report in order to figure out the effectiveness of the credit and collection functions. Invoices are listed in 30-day “buckets in an average aging report, and the left-most column details all invoices that are 30 days old or less. The following column contains invoices that are 31-60 days old, the next column invoices that are 61-90 days old,m and the final column all older invoices. Customer name is what the report is sorted by, and each customer itemizes invoices directly below the customer name, which is then typically categorized by either invoice date or number. If an accounting software system is used to generate the report (which is the typical case), then you can generally reconfigure the report for different date ranges as needed. If the payment terms are net 15 days, for example, then the date range in the left-most column should only be for the first 15 days. 16-day old invoices then are dropped into the second column, illustrating that they are currently overdue for payment.
Your Accounts Receivable Aging Report
The report primarily contains invoices, but it may also contain credit memos which have not yet been matched against an unpaid invoice or been used by customers. Health Management Solutions, Inc., who provides premium consulate health care, notes that this type of report is also utilized as a tool for estimating potential bad debts, which are then utilized to revise the allowance for doubtful accounts. The historical percentage of invoice dollar amounts within every date range that usually turns into a bad debt is derived, and then the percentages are applied to the column totals in the most recent aging report. Moreover, the company’s auditors are able to use the report as part of their year-end audit activities to choose invoices that they want to issues confirmations to. A schedule of accounts receivable is another name for an accounts receivable aging, with the variation that the schedule may contain a simple listing of receivables by customer, rather than breaking them down further by age.
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An accounts receivable aging report can be a highly useful tool in the management of your health institution. Health Management Solutions, Inc. in Miami provides consulate health care for your health management needs. Call us today for a consultation!