# Ageing Schedule of Receivables
## What is an Ageing Schedule?
A technique used to monitor receivables — it classifies debtors based on the age (time elapsed) since the invoice date.
## Typical Classification
| Age Bucket | Status |
|---|---|
| 0 – 30 days | Within credit terms (healthy) |
| 31 – 60 days | Approaching overdue |
| 61 – 90 days | Overdue — follow-up needed |
| 91 – 120 days | Significantly overdue — strong action |
| More than 120 days | Highly doubtful / potential bad debt |
## Why Prepare It?
1. Gives insight into collection patterns of debtors.
2. Helps direct collection efforts to the most overdue accounts.
3. Enables close control over the quality of individual accounts.
4. Facilitates comparison with:
- Earlier month's figures
- Corresponding month of the earlier year
- Other firms in the industry
## How It Helps Management
- Tracks deterioration in the receivables quality.
- Spots chronic late payers for credit policy review.
- Provides early signals of bad debt risk ⇒ helps in making provisions.
## Example Layout
| Customer | 0-30 | 31-60 | 61-90 | 91-120 | >120 | Total |
|---|---|---|---|---|---|---|
| ABC Ltd. | 50,000 | 20,000 | — | — | — | 70,000 |
| XYZ Ltd. | 10,000 | 5,000 | 25,000 | 15,000 | 30,000 | 85,000 |
XYZ shows worrying ageing — most receivables are stale, indicating poor collection.