Refering here to the two primary aging methods for Accounts Receivable customers, this particular topic is very complex and probably one of the least understood.

Balance Forward Aging
The easiest way to look at balance forward is to think of a credit card. When the customer makes a payment, the amount is applied to the oldest balance on their account. The periodic statements sent out show a "balance forward", and the transactions (payments, invoices, debit memos, finance charges etc.) which occured since the last statement cycle. This is not to say that a proper aging cannot be generated. On the contrary, automated systems like Samco's Power Accounting are quite capable of doing Current/30/60/90 agings on balance forward customers.

Open Item Aging
Unlike balance forward, payments, credits, and debits are applied to specific source documents rather than the balance on the customer's account. This method allows for more flexibility and tighter control for both you and your customer.

More Reading Material....
If you are an existing user of Samco's Power Accounting system you may want to check out the Aging Report chapter in the Accounts Receivable user manual.

- Updated: December 20, 1999