Debtors ageing
Definition
A debtors ageing groups everything your customers owe you by how long it has been outstanding — current, 30, 60, 90 days and older. It is the fastest read available on whether sales are turning into cash. The shape matters more than the total: a book weighted to the current column is healthy at any size, while one with weight in the 60- and 90-day columns describes a cash-flow problem that has already happened, whatever the revenue line says about the same period.
What it changes in practice.
Food businesses sell on terms and buy on shorter ones. A wholesaler paying suppliers in 15 days while being paid in 55 is financing its own customers, and the ageing report is where that shows up first — long before the bank balance makes it obvious.
The other reason to read it weekly rather than monthly is that ageing is where a customer in trouble becomes visible. An account that quietly thins out — smaller orders, slower payment — is a different problem from one large late invoice, and only the trend shows it.
What it looks like when Finch catches it.
Related terms and reading.
Start with a one-week Operations Audit.
R2,000, credited to your first month. We tell you where the money is leaking — whether you sign or not.