For each year, calculate the percentage of account receivables written off out of total credit sales. b. For each year, calculate the percentage of account receivables written off in each category of outstanding receivable age (think about which dates are relevant when assigning the categories of aging receivables). c. Collect the data for years 2013-2017 (total outstanding receivables, percentage of receivables written off relative to credit sales, and the percentage of receivables written off in each aging category of outstanding receivables), and fill in the table in the "Solution" worksheet.

A periodic report called "accounts receivable aging" classifies a company's accounts receivable based on how long an invoice has been outstanding.

It is used to gauge a company's customers' dependability and financial health.

This is a warning sign that business may be slowing down or that the company is taking greater credit risk in its sales practices if the accounts receivable aging reveals that the company's receivables are being collected much more slowly than usual.

As a management tool, accounts receivable aging can show which customers are becoming credit risks and whether the company should continue doing business with those who pay on time.

Which AR aging percentage is ideal?

Additionally, it is essential to keep an eye on the percentage of claims that have not been processed in less than five percent of total claims. This performance indicator is essential for increasing payments and maintaining low aged AR. Less than 5% of all claims should not have been processed for more than 30 days.

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