Definition
A report that groups unpaid invoices by how long they've been outstanding.
Why it matters
Funders use the aging report to judge which receivables are eligible.
Where it shows up in a deal
The aging is the first document a funder asks for and the one it keeps asking for, usually monthly or weekly once the facility is live. Underwriting reads it in buckets, reconciles the total to your general ledger, and uses it to find concentration, slow payers and the gap between your stated terms and reality.
What it affects
- Bucket distribution decides which invoices are eligible and which are carved out.
- Cross-aging rules can disqualify a customer's entire balance once part of it goes past due.
- An aging that does not reconcile to the ledger stalls underwriting more often than weak credit does.
- Unposted credit memos make measured dilution look erratic, which is priced more harshly than a steady number.
A worked example
A $400,000 aging includes $20,000 over 90 days, which is ineligible. One buyer owes $48,000, of which $15,000 sits in that over-90 bucket - 31% past due. A 25% cross-aging rule removes that buyer's remaining $33,000 as well, leaving $400,000 - $20,000 - $33,000 = $347,000 eligible.
The common mistake
Related terms
- Eligible ReceivablesInvoices that meet a funder's criteria for advancing.
- Days Sales OutstandingThe average number of days it takes to collect payment after a sale.
- Concentration LimitA cap on how much of a facility can be tied to a single customer.
- Borrowing BaseThe maximum amount available under an asset-based line, calculated from eligible collateral.
Questions about how aging report affects your facility?
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