Schedule of accounts receivable

The schedule of accounts receivable is a report that lists all amounts owed by customers. The report lists each outstanding invoice as of the report date, aggregated by customer. There are several uses for this schedule, which are as follows:

  • Collections. The collections team examines the schedule to determine which invoices are overdue, which then triggers collection calls to customers.
  • Credit. The credit department reviews the report to see if any customers are so late in paying that their credit levels should be reduced.
  • Bad debt calculation. The information in the report is used to develop a bad debt percentage, which is used to update the balance in the allowance for doubtful accounts.
  • Audit examination. Outside auditors make selections from the report as part of their year-end testing procedures, to see if the year-end accounts receivable balance is accurate.

The schedule of accounts receivable usually clusters invoices into 30-day time buckets. Those invoices in the 0-30 day time bucket are considered to be current. Additional time buckets cover the 31-60, 61-90, and 90+ day periods. Invoices located in the older time buckets are targeted for more aggressive collection activities. Those in the oldest time bucket may be written off.

The schedule is a standard report in most accounting software packages, and comes with pre-configured time buckets. It is sometimes possible to alter the report settings to use different durations for the time buckets.

Related Courses

Bookkeeping Guidebook 
How to Audit Receivables 
New Controller Guidebook