Glossary
Accounts Receivable Aging
A report grouping outstanding client balances by how long they have been unpaid, typically in 30, 60, 90 and 120-day buckets.
Aging turns a receivables total into a diagnosis. A large balance that is entirely current is a billing cycle; the same balance concentrated past ninety days is a collection problem and probably a write-off in the making.
In an agency, aging carries extra weight because unpaid premium under agency bill does not relieve the remittance obligation. Receivables aging past the remittance date are effectively being funded out of agency money, and left unchecked they pull the trust account out of balance.
See also
- Agency Bill — A billing arrangement in which the agency invoices the insured, collects the premium, and remits it to the carrier net o…
- Days Sales Outstanding — The average number of days it takes an agency to collect premium after invoicing, used as a single-number measure of col…
- Write-Off — The accounting removal of a receivable judged uncollectible, recognising the loss and clearing the balance from the ledg…