Happy Republic day to all our Indian readers.

You saw some basic reports of an Ageing Analysis.



Now, today let us look at some reporting parameters, which make an “Ageing Analysis” effective.

You can structure your reports on various parameters within each defined bucket as well:

  • Geographical – splitting the reports by geography really helps adding a strong component for the collections teams.
  • Nature of delinquency – If you saw the 2nd report, giving level 2 details of the outstanding bills, there were a number of items, which needed internal resolution, i.e. at your client’s end. There were just 2 items for collections follow up. This category can also be clubbed with the geography in some mid-size clients, where the legal, sales, accounts can be classified as a geography value. Ideally for large clients, this cannot be resorted to.
  • Risk factor – You can assign a risk factor, based on how difficult the recovery might be.
  • Value of invoice – higher value recoveries may need a stronger focus.
  • Relationship factor – During your analysis you find that a customer who was extremely good at payments starts to default.
  • Industry factor – You may also segregate the receivables by the business industry. This is not really a strong parameter, however helps sometimes. A particular industry is facing a recession, so collections will be a difficult proposition and more follow up will be needed.

Thus the reporting will need to be developed based on the needs and the situation of your client.

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