AR Overdue Amount indicates the quantum of receivables that are past due date. The KPI AR – Percentage of Overdue normalizes the overdue amount against Net Total Receivables.
Total Accounts Receivable (as of 1-May-2016): $123,423 AR Overdue (as of 1-May-2016): $12,312 Percentage of Overdue (as of 1-May-2016): 10% (i.e. 12312/123423)
It is a time context sensitive KPI and always reported with a date point reference.
This KPI helps in guaging cash that cannot be realized and its impact in immediate cash flow. High values for this KPI indicates trouble with collections and customer facing activities.