This book is the sixth of seven books which introduces the basic principles of accounting. This book introduces managerial accounting, with a primary focus on internal business reporting, decision making, planning, strategy, budgets, and cost control. Cost-volume-profit analysis, variable cost, fixed costs, mixed costs are introduced. Break-even analysis, contributions margin, target income calculations, and sensitivity analysis are all discussed in detail. In addition, product costs, job costing, process costing, and activity-based costing are introduced.
The accounts receivable aging report is a critical tool for managing cash flow for companies that extend credit to their customers. This report breaks down the customer balances by how long they have been owed. Most aging reports include separate columns for invoices that are 30 days late, 60 days late and 90 days late or more. A manager can use the aging report to find problems with the company's collections process. If a significant number of customers are unable to pay their balances, the company may need to tighten its credit policies. Periodically analyzing the accounts receivable aging also keeps the collections department from overlooking old debts.