When operating your business, you’ll employ an array of metrics and reports in order to build an accurate understanding of your customer base and business health. MRR, ACV, Churn, Growth Efficiency Index (GEI) are all metrics which tell a lot about a business. But there are a host of more targeted metrics and reports which provide meaningful insights about your business and its operations. Accounts receivable (AR) balance, which tracks your business’s receivables amount, falls into this category.
Any sale you’ve made where your customer has yet to pay will roll up into your AR balance. Think of your receivables as your outstanding invoice balance. Your AR balance speaks to the health of your customer base and the efficiency of your business’s collections processes. While AR balance is important to any business, it’s especially important to a subscription business where invoices and payments are being sent and collected on a recurring basis. As you can imagine, nobody wants to have a bunch of unpaid invoices. The sooner your business is able collect payments from your customers the better.
To help track receivables and collections, businesses will often use AR Aging Reports. These reports are just as they sound. They tell you how your Accounts Receivable balance is aging. They are periodic reports which categorize your company’s accounts receivable according to the length of time an invoice has been outstanding. AR Aging Reports are especially helpful when it comes to balancing your accounts. Businesses will reconcile their accounts on a monthly basis to ensure everything balances out.
For this reason, Zuora now includes credit balances on our AR Aging reports. So, in addition to showing you your account receivables (AR), we also show you your account credit balances. Now, with all of your customer account data in one simple report, your monthly reconciliation efforts become much easier. Have an understanding of what a customer owes, what a customer is owed, and balance your accounts accordingly.