What is an overdue balance?
An overdue balance is the part of what a customer owes you that has passed its due date. Invoices that are not yet due are part of the outstanding receivables, but not part of the overdue balance.
An overdue balance is a figure for one date. A balance that is rising and a balance that is falling look the same until you compare two dates. The overdue receivables ratio turns the same idea into a percentage of all receivables.
Businesses track the overdue balance by customer and in total, because it shows where cash is stuck. It is often split by age, such as 1 to 30, 31 to 60 and 61 to 90 days past due, in an aged debt analysis.
Reading the figure takes a second number. A large overdue balance on a large book can be normal, and a small one on a small book can be a warning. Compare it with the same date last month before you act on it.
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