An aged accounts receivable (AR) report is a financial document that lists all of the unpaid invoices or amounts that a business is owed by its customers. It is usually organized by the length of time that each invoice has been outstanding, with the oldest invoices listed first. An aged accounts payable (AP) report is similar, but it lists all of the unpaid bills or amounts that a business owes to its vendors or suppliers.
The purpose of an aged AR or AP report is to give a business a clear overview of its outstanding debts and help it manage its cash flow. By seeing which invoices or bills have been outstanding for the longest time, a business can prioritize which debts to pay first and make sure that it has enough cash available to cover its expenses.
It is not uncommon for a bank to ask for a copy of an aged AR or AP report when a business is applying for a loan or credit line. The bank may use the report to assess the business’s financial health and determine its creditworthiness. The bank may also use the report to negotiate the terms of the loan or credit line, such as the interest rate or repayment schedule.
In summary, an aged AR and AP report is a financial document that lists a business’s outstanding debts and is used to manage cash flow and assess creditworthiness. If your bank is asking for a copy of an aged AR or AP report, it is likely because it wants to evaluate your business’s financial health before approving a loan or credit line.
