Financial reports help businesses see how they're doing and make better decisions. In this series, each article will explain a specific report, covering what it is, why a CPA needs it, how the numbers are calculated, and a simple example to show how it works. Whether it's about tracking income, managing costs, or checking how well your team is working, these articles will give you the basics to make sense of these important reports.
Aged Receivables (AR) Summary
What’s in this Report? Does include:
Archived, inactive, and deleted clients
Because archived and deleted clients will still appear on the AR Summary report, any invoices that were still active at the time of the client’s archive/deletion may still appear on it. If an invoice appears on the AR Summary report that shouldn’t be there, follow these steps to resolve it:
Removing Deleted Clients from the AR Report
Go to the Aged Receivables Detailed Report.
Check if the invoice tied to the deleted client is hyperlinked.
Open the invoice directly by selecting its hyperlink.
Archive or delete the invoice from the opened page. Once the associated invoice is archived or deleted, the client will no longer appear in the AR Summary report.
Removing Invoices Associated with Deleted Clients from AR Reports
Navigate to Billing > Reports > Aged Receivables Detail.
Click Customize (top right) and filter for the specific client to run the report.
In the results, click the invoice to open it.
Use the three-dot menu and select Archive. Archiving removes the invoice from AR Aging immediately.
If further deletion is needed, go to the Archived Invoices area and delete the invoice from there. Does not include:
Archived and deleted Invoices
Report type | Column description | Permissions requirements |
Aged Receivables Summary: displays a summary of all aged receivables in Canopy | Client: the customer Current: balance owed in the current month Aging Schedule: how many days an invoice is past due Total: all outstanding invoices and credits | Billing Reports, Assigned Clients |
📊 What is an Aged Receivables (AR) Summary Report?
An Aged Receivables (AR) Summary Report is a financial document that shows the outstanding amounts that customers owe a business over a set period. It breaks down these unpaid invoices into different time buckets based on how long they've been overdue. The usual categories are:
Current: Invoices that are still within their payment terms (e.g., due within 30 days).
31-60 Days: Invoices overdue by 31 to 60 days.
61-90 Days: Invoices overdue by 61 to 90 days.
Over 90 Days: Invoices overdue by more than 90 days.
👨🏻💼 Why Would a CPA Need It?
A CPA would need this report for several reasons:
Cash Flow Management: It helps the business understand how much money is expected to come in and when. This is crucial for planning expenses and managing cash flow.
Identifying Problems: The report can highlight issues with customers who are consistently late in paying or those who might be at risk of defaulting.
Financial Health: It provides a snapshot of the company's receivables, which is important for assessing the financial health of the business.
Auditing: During audits, CPAs use this report to verify the accuracy of the accounts receivable balance and to ensure that revenue is recognized correctly.
🔢 How is the Math Calculated for This Report?
The math behind the Aged Receivables Summary Report is pretty straightforward:
Categorizing Invoices: Each invoice is categorized based on the number of days it is overdue. This is done by subtracting the invoice date from the current date. For example, if today is August 16th and the invoice was dated July 1st, it's 46 days old and would fall into the "31-60 Days" category.
Summing Up Amounts: Once the invoices are categorized, the total amount owed in each category is summed up. This gives you the total receivables for each aging bucket (e.g., $10,000 in the 31-60 Days bucket).
Total Receivables: Finally, the sum of all the buckets gives the total accounts receivable amount. This shows how much money the business is waiting to collect.
For example, if a business has the following overdue invoices:
$5,000 current
$3,000 overdue by 31-60 days
$2,000 overdue by 61-90 days
$1,000 overdue by over 90 days
The report would show:
Current: $5,000
31-60 Days: $3,000
61-90 Days: $2,000
Over 90 Days: $1,000
Total Receivables: $11,000
This summary helps a business keep track of what’s owed and manage its collections process effectively.
Additional Notes on Archiving
Archiving and Data Retention: Archiving helps retain invoice records without altering financial histories while keeping AR reports clean and accurate.
Non-Cascading Actions: Client deletion does not automatically remove associated invoices to prevent accidental loss of financial documentation. This requires deliberate action on each invoice.