All 21 Aging Analysis questions
More in Aging Analysis
How is aging used to prioritize collections activity? How do you reconcile the aging report to the general ledger control account? What red flags can an aging report reveal? What is 'best possible DSO' and how does it differ from standard DSO? How does aging support inventory of unapplied credits on customer accounts? How does aging drive the allowance for doubtful accounts under the aging method? What is CECL/expected credit loss and how does it change receivables provisioning? How can automation and analytics improve aging management? How can you forecast cash collections from an aging report? How do you use aging trends to set collection targets and staffing?
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Accounts Payable & Receivable › Aging Analysis

How does disputed AR distort aging and what should you do about it?

Intermediate

Answer

Disputed invoices sit in the aging as overdue even though the customer is withholding payment pending resolution, overstating collectible overdue balances and understating collection performance. Flagging disputes separately (a dispute/deduction status) gives a truer view and directs effort to resolving the dispute so the cash can flow.
Real-world example Tagging $40k of disputed invoices separately reveals that 'true' overdue AR is far lower, refocusing the team on dispute resolution.

Common follow-ups: Why separate disputes in aging? | Who resolves a disputed invoice?

Cash Application Collections & Bad Debts Aging Analysis
All 21 Aging Analysis questions