The aging of accounts receivable refers to the time elapsed from the date when the accounts receivable in the balance sheet are sold and generated to the balance sheet date. In short, it is the time when accounts receivable exist on the books.
Analyzing the aging of accounts receivable is helpful to evaluate the operating performance of the sales department, speed up the collection and reduce the loss of bad debts; It is beneficial for users of accounting statements to better understand the assets of the company.