CASH COLLECTED PER AGING BUCKET

Description: When overdue accounts receivable are assigned to a collections person, the collector is typically judged based on the percentage of those receivables collected. The collections person knows that the most recent receivables are usually the ones most easily collected, however, and so will spend a disproportionate amount of time working on them. This means that older receivables are less likely to be resolved, and so will be more likely to eventually be written off. To detect if this problem exists, measure the amount of cash collected per aging bucket. This is an unusual metric, because it is in the form of a report, rather than a ratio.

Formula: Create a grid report with a separate column for each aging bucket and a separate row for each collector. Within each cell in the grid, list the cash collected, the amount outstanding, and the percentage collected. The report format is shown in the following example.