How to report monthly subscription on A/R Aging?

[elmsley4]

I am a banker and I have a Borrower who bills, for sake of example, $12,000 / year for his services to businesses.

He has 10 clients and shows A/R of $120,000. His clients pay by auto-payment on their credit card at $1,000 / mo.

Corrrect me if I'm wrong, but on his A/R Agining report, he shouldn't have anyhing past 30-days. My Borrower is compiling his own internal financials (usually not a great idea), and he's showing most of his A/R past 90+ days, as he's listing the total amount billed. This is wrong, but I am not sure how he should report his A/R Aging.

Any help is appreciated!

Best,

Joel

 

[kirby]

Yeah this is big time wrong. He bills $12,000 a year but he only EARNS $1,000 a month for each client . So his A/R at the end of each month should be $12,000 not $120,000. And if his balance sheet A/R is overstated then something else is also overstated. At the end of January he should show only $12,000 in earnings. So to show $120,000 in A/R in January he must also have a deferred credit of the earnings somewhere (else he would be showing $120,000 in earnings in January.) I hope you are not lending to him based on his A/R figure.......