The Tally Accounts Receivable Prioritization report expands on the A/R aging statement produced by most accounting packages. The key difference is the prioritization of the overdue invoices based on changes the customers payment patterns and the amount overdue, in addition to the how many days late the invoices are.
The first tab is an A/R Aging report that lists every customer with any overdue payments.
Each customer is assigned a priority based on a combination of their past payment performance, the amount overdue, and how many days invoices are overdue. The priority is carried over to the second tab, which has extra details for each invoice.
Tally Street analyzes the payment history and performance of every customer, individually. If a customer’s overdue invoice is longer overdue than typical for him/her, then we identify him/her as “Yes, unusually late”. For example, if a net-30 customer normally paid around 35 days and now they are 50 days late, then that will add to their prioritization.
The Tally DSO is an improvement on older DSO calculations that handles partial payments and provides a more accurate, average number of days that payments were received from this customer. We use the Tally DSO for the trailing 12 months (TTM) for the comparison to the invoices now overdue. If the customer does not have a Tally DSO (TTM), that is most likely because they haven’t made a payment in the most recent 12 months.
Each of the 30, 60, 90 or over 90 day columns contains the amount of money overdue by 30 days, 60 days, etc. for each customer. The total amount overdue and the total number of overdue invoices are also included. Because “over 90” could include some very late invoices, the date of the oldest overdue invoice and the number of days it is late are included.
Tally Street forecasts accounts receivable collections by analyzing the payment history of a business’s customers over both the short-term and long-term. Multiple forecasting models are then tested and the best one for each business is selected. The result is a completely automated forecast that adjusts to changes in company and customer performance. Still, surprises will happen so lists of customers who diverged from their past behaviors and paid earlier or later than expected are also provided.
The first section is a rolling forecast of the total payments expected to be received each week (Sunday through Saturday). Previous forecasts for past weeks are also included and compared to the amounts actually collected. The total amount coming due each week and the total amount currently outstanding are also provided.
Happily, some customers may pay earlier than anticipated based on their payment history. This section contains a list of each of those from the previous week along with invoice numbers, amounts paid, weeks the payment was expected, and the number days invoices were outstanding.
Unfortunately, some customers will pay later than expected, even if they were already predicted to pay late. These customers may merit some special attention. This section of the report lists those customers, the invoices affected, invoice amounts, due dates, weeks payments were expected, and the number of days invoices are outstanding.