Account Balances
The account balance is updated every time an invoice, credit note or payment receipt is added to a customer's account.
How are the aged balances calculated?
The aged balances are running balances on the customer account. They are not related to the reconciliation process therefore, in general the age balance for a given month will not be the total of all the sales for that month.
The following invariant is always true for any set of balances:
Total = the sum of all the aged balances
For the purpose of the examples on this section we will create an account with current balance of:
| Total | May | April | March | February | Over Due | ||
| Before | 1500.00 | 100.00 | 200.00 | 300.00 | 400.00 | 500.00 | |
Invoices
All invoices are add to the current month.
Example An invoice is raised for 150.00.
| Total | May | April | March | February | Over Due | ||
| Before | 1500.00 | 100.00 | 200.00 | 300.00 | 400.00 | 500.00 | |
| After | 1650.00 | 250.00 | 200.00 | 300.00 | 400.00 | 500.00 | |
The value of the invoice was added to the Total and May.
Credit Notes
All credit notes are add to the current month.
Example A credit note is raised for 175.00.
| Total | May | April | March | February | Over Due | ||
| Before | 1500.00 | 100.00 | 200.00 | 300.00 | 400.00 | 500.00 | |
| After | 1300.00 | -75.00 | 200.00 | 300.00 | 400.00 | 500.00 | |
The value of the credit deducted from to the Total and May.
Receipts
All receipts are deducted from the oldest balance. If the aged balance would become negative, the difference is carried to the next younger balance.
Example 1, basic. A receipt is raised for 300.00.
| Total | May | April | March | February | Over Due | ||
| Before | 1500.00 | 100.00 | 200.00 | 300.00 | 400.00 | 500.00 | |
| After | 1200.00 | 100.00 | 200.00 | 300.00 | 400.00 | 200.00 | |
The value of the receipt is deducted from the Total and Over Due.
Example 2, roll over. A receipt is raised for 1000.00.
| Total | May | April | March | February | Over Due | ||
| Before | 1500.00 | 100.00 | 200.00 | 300.00 | 400.00 | 500.00 | |
| After | 500.00 | 100.00 | 200.00 | 200.00 | 0.00 | 0.00 | |
The value of the receipt is deducted from the Total, February and Over Due are zeroed and the remainder is deducted from March.
Example 3, a bounced cheque or reversal of a receipt. A receipt is raised for 800.00.
| Total | May | April | March | February | Over Due | ||
| Before | 1500.00 | 100.00 | 200.00 | 300.00 | 400.00 | 500.00 | |
| After | 700.00 | 100.00 | 200.00 | 200.00 | 200.00 | 0.00 | |
The value of the receipt is deducted from the Total, Over Due is zeroed and the remainder is deducted from February.
A receipt is raised for -800.00.
| Total | May | April | March | February | Over Due | ||
| Before | 700.00 | 100.00 | 200.00 | 200.00 | 200.00 | 0.00 | |
| After | 1500.00 | 100.00 | 200.00 | 200.00 | 200.00 | 800.00 | |
The value of the receipt of -800.00 is “deducted” from the Total and Over Due.
Example 4, A credit not is raised, and a refund issued. A credit note is raised for 150.00.
| Total | May | April | March | February | Over Due | ||
| Before | 1500.00 | 100.00 | 200.00 | 300.00 | 400.00 | 500.00 | |
| After | 1250.00 | -50.00 | 200.00 | 300.00 | 400.00 | 500.00 | |
The value of the credit was deducted from the Total and May.
A receipt is raised for -150.00.
| Total | May | April | March | February | Over Due | ||
| Before | 1300.00 | -50.00 | 200.00 | 300.00 | 400.00 | 500.00 | |
| After | 1500.00 | -50.00 | 200.00 | 300.00 | 400.00 | 650.00 | |
The value of the receipt of -150.00 is “deducted” from the Total and Over Due.