Accounts receivable teams use several types of reports to stay abreast of collections, cash flow challenges, and invoice disputes. In this section, we look at some of the commonly used accounts receivable reports.
1. Aging report
Aging reports are the most commonly used accounts receivable reports. Aging reports provide details on how much of your revenue is outstanding and what amounts are due by customers. The report segments outstanding receivables into different aging buckets based on the number of days they have been outstanding (less than 30 days, 30 – 60 days, 61 – 90 days, and more than 90 days).
The AR aging report is useful to identify working capital issues, monitor customer credit quality, and set credit policies.
A business needs to rethink its collections strategy if a large percentage of receivables fall into buckets that indicate accounts outstanding for long periods (e.g. > 60 days). The company needs to rework its credit policy to mitigate risks and improve its collection strategies to achieve timely payments.
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Aging report template (Source)
2. Customer Reports
AR teams use a variety of reports to keep track of critical customer accounts and customer payments. Some types of customer reports in AR management include:
- Customer list: This report gives complete details about customers including their credit limits, salesperson associated with the account, payment information, currency preferences, geography, discount category, etc.
- Revenue by customer: This report segments customers by the amount of revenue they generate for your business ( < $1 Mn, $ 1 Mn – $ 5 Mn, etc.) This helps you identify who your top customers are and where you should be offering personalized services vs. custom services
- Customer transaction report: The customer transaction report provides you an overview of all the interactions with the customer(s) for a given time period. For example, you could use the report to get an overview of all instances where invoices were sent to customers between January 1 – March 31, 2022. You could also look at customer accounts that have overdue receivables, unapplied cash, etc. for the specified time frame
3. Cash flow forecasting reports
Cash flow forecasting reports help you predict cash flow, revenue reconciliation, and bad debts. It helps you forecast how much you may have to write-off and where you need to increase collection efforts to lower bad debt. Some of these reports may also include annual recurring revenue forecasts and other revenue forecasts.
4. Aged Trial Balance
An aged trial balance lists customers’ account receivable balances over a time period so that you can track what is overdue. It can be printed for any date range and contains columns for credit balances, customer contact details, codes, etc.
Aged Trial Balance (Source)
5. Customer credit reports
Credit reports provide detailed insights into customers’ creditworthiness. Credit reports generated by AR automation solutions like HighRadius combine data from multiple credit agencies such as D&B, Experian, etc. to provide 360o visibility into your credit risk. The credit reports are auto-updated to reflect the latest news and information about customer accounts. These reports help AR managers make the right decisions on extending credit lines and reduce the business’ credit risk exposure.
6. Transaction reports
Transaction reports provide details into AR tasks carried out during the time period. These reports include error reports, batch listings, journal entries, etc. Transaction reports are a crucial part of your audit trail for accounts receivable transactions.
7. Payment reports
These reports show payment details including paid invoices, open invoices, part payments, payment dates, payment methods used, etc. for each customer. You can use filters on these reports to track payment by currency, date range, invoice number, etc.
8. Cash reconciliation reports
The cash reconciliation report shows a summary of payments received, cash applied, unapplied cash, credit remaining, and refunds. It provides an overview of the financial activity at your business and helps provide a picture of your cash position.
Cash Reconciliation Reports generated by HighRadius solution
(Representative image – Source)
9. Sales reports
The item sales report helps track revenue, product returns, costs, and profit margins for a given period. This report helps you identify which products have the highest returns or complaints and those that are the most profitable.
10. Productivity reports
Productivity reports include reports around exception handling productivity, user productivity based on time spent, collection effectiveness index reports, payment committed vs. payment collected by collector, etc. These reports help AR managers gauge the efficiency of their operations and take necessary corrective actions as needed.
Payment Committed vs. Payment Collected report in HighRadius
Representative image – Source)
Other AR reports
There are several other accounts receivable reports that AR managers use every day to track the efficiency of their operations. Some of the other AR report types include DSO report, credit applications submitted vs. abandoned, customer classification report based on credit risk, top customers by outstanding amount, P2P forecast reports, certificate expiry reports, customer dispute by reason code report, etc.
Other reports available in HighRadius solutions (Representative image – Source)
Considering that many types of accounts receivable reports are needed to track cash flows and revenue, it is prudent to automate report generation rather than use manual methods.
