AR: What is the calculation formula of Average Age in Debtor Collection report

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Question: What is the calculation formula of Average Age in Debtor Collection report?

Version: 1.8 / 1.9 / 2.0

Average age1a.png


Answer:

The formula of Average Age is:

Average Age = Total Age / Number of knockoff transaction


Example:

For knockoff no.1:

Payment Days = Payment Date (OR Date) – DocDate (Invoice Date)
= 07/10/2022 – 23/05/2022
= 137 days


Age = Payment Days – Credit Term
= 137 days – 30 days
= 107


Age for knockoff no. 1 = 107


In case there are 8 knockoff, Total Age means add up all the 8 ages.

Average Age = Total Age / Number of knockoff transaction
= (107 + 105 + 54 + 43 + 41 + 33 + (-23) + 72) / 8
= 54


By: Christine 221007, Lay Swan 221026, P221027


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