Schedule of Accounts Receivable
A Schedule of Accounts Receivable is a detailed list or report that breaks down the amounts owed to a business by its customers. It provides a summary of all outstanding invoices at a specific point in time and is used to confirm that the total amount of accounts receivable listed on this schedule matches the balance in the general ledger’s accounts receivable account.
A typical Schedule of Accounts Receivable will display the following:
- Customer Name: The name of each individual customer who owes money to the business.
- Invoice Number: Specific identification number for each outstanding invoice.
- Invoice Date: The date when the invoice was issued.
- Amount Due: The amount the customer owes for that particular invoice.
- Age of Receivable: This categorizes the outstanding amounts based on the length of time they have been outstanding (e.g., 0-30 days, 31-60 days, etc.). Aging is crucial because it helps businesses identify potential collection issues and estimate potential bad debts.
- Total Amount Owed: This is often found at the end of the schedule and represents the sum of all amounts owed by all customers. This total should match the accounts receivable balance in the general ledger.
The Schedule of Accounts Receivable helps businesses:
- Track Outstanding Invoices: By listing all unpaid invoices, businesses can efficiently manage and track collections.
- Manage Cash Flow: By understanding who owes them and how much, businesses can better anticipate incoming cash flows.
- Identify Collection Issues: Aging of receivables can help pinpoint customers who are habitually late or who might be experiencing financial difficulties.
- Estimate Bad Debts: Based on the aging, businesses can make more accurate estimates of uncollectible amounts and adjust their allowance for doubtful accounts accordingly.
In essence, the Schedule of Accounts Receivable is an essential tool for any business that extends credit to its customers, as it provides a detailed and organized view of funds that are expected to come in.
Example of a Schedule of Accounts Receivable
Here’s an example of a Schedule of Accounts Receivable for ABC Electronics at the end of April 2023:
Schedule of Accounts Receivable – ABC Electronics – April 30, 2023
| Customer Name | Invoice Number | Invoice Date | Amount Due | Age of Receivable |
|---|---|---|---|---|
| Tech Traders Ltd. | #1012 | April 5, 2023 | $500 | 0-30 days |
| Gadget Galaxy | #1005 | March 25, 2023 | $750 | 31-60 days |
| Mobile Mavens | #0989 | February 28, 2023 | $1,200 | 61-90 days |
| Gadget Galaxy | #0987 | February 20, 2023 | $600 | 61-90 days |
| Tech Traders Ltd. | #0980 | February 10, 2023 | $900 | 61-90 days |
Total Amount Owed: $3,950
In this example, the schedule indicates that:
- Tech Traders Ltd. owes a total of $1,400 ($500 + $900) from two different invoices, one recent and another that’s been outstanding for more than 60 days.
- Gadget Galaxy owes a total of $1,350 ($750 + $600) spread across two invoices with varying ages.
- Mobile Mavens owes $1,200 from an invoice that’s been outstanding for over 60 days.
From this schedule:
- ABC Electronics can see that their total outstanding receivables amount to $3,950.
- The aging of the receivables suggests that several invoices are between 61-90 days old, which might require more aggressive collection actions.
- ABC Electronics should ensure that the total amount owed ($3,950) matches the accounts receivable balance in their general ledger as of April 30, 2023.
This schedule can guide ABC Electronics in making decisions about potential promotions (perhaps to prompt faster payment), collection efforts, and even the consideration of whether to continue extending credit to certain customers.
