KEY TERMS

Aged receivables analysis

a report that is both useful for identifying late payers and for providing information about receivables and debt collection efficiency to management. It analyses the total amount outstanding according to how old the debt is as at the date of the report.

Allowance for receivables

an allowance made against receivables that probably will not be collectable; it is netted off the receivables balance in the statement of financial position. The allowance is made against one or more specific receivables when there is objective evidence that the amount due may not be fully recovered.

Irrecoverable debt

a receivable which is considered to be uncollectible.

Statement of account

a statement that sets out the transactions that a business had with a particular customer since the previous statement.

Trade receivable

a customer who owes money to the business as a result of buying goods or services on credit.