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How to prepare an AR aging analysis?

This method categorizes the expenses based on a schedule that categorizes the number of days or months outstanding. Management must apply a percentage uncollectible estimate to each aging bucket.

Once management has the percentage estimate for each bucket, you multiply the figures, and you get the expected uncollectible amount for each aging bucket. The total reserve is then the sum of the uncollectible estimates for each aging bucket!

AR aging analysis

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