What is an Accounts Receivable Aging Report?
The most important report provided by your dental software is the:
Accounts Receivable Aging (sometimes called an accounts receivable reconciliation) is a process of categorizing all the amounts owed by all customers, including the length of time the amounts have been outstanding (unpaid), thus you are considering their age, or “aging” this information. The standard categories for this type of report are:
- Current – due immediately
- 1 – 30 days – due within the next 30 days
- 31-60 days – a month overdue
- 61 – 90 days – two months overdue
- 91 and over – more than two months overdue
If a customer has several bills that were incurred at different times, the report will show how much is due at what time. For example, for Betty Smith:
- $230 30 days
- $120 60 days
- $390 Over 90 days.
The purpose of this accounts receivable aging is to show the business owner what receivables need to be dealt with more urgently because they have been overdue longer.
The Accounts Receivable Aging Report is a standard report provided with all dental and business accounting software programs, including online systems.
You may have several patients with small balances over 120 days and now they are due for a 3, 4 or 6 month recall (recare) appointment. You will need to collect the old money and any new money due at the appointment. Many front office people do not look at the aging report and patients don’t pay their balances causing serious cash flow problems.