Accounts receivable balances, the age of those receivables, and days sales outstanding (DSO) values are important metrics for monitoring customer payment patterns and the performance of your firm's collections process. The AR and DSO Analytics enable you to identify problems quickly for your organizations or the firm as a whole, and to display the supporting detail you need to analyze and resolve those problems.
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In this topicIf Revenue Is Not Available for a Period If You Filter by Aging Range or Invoice ID |
As part of Costpoint Analytics configuration, your system administrator specifies whether your firm calculates the age of receivables based on invoice dates or payment due dates.
On the AR and DSO tab in Costpoint Analytics, you can analyze accounts receivable data based on aging ranges. Your system administrator defines up to five ranges during the Costpoint Analytics configuration process (for example, 0 - 30 days, 31-60 days, and so on).
The AR amount that Costpoint Analytics displays for each range for a given period is the sum of the invoice AR amounts with ages in that range as of the end of that period.
If your firm ages invoices from the invoice date and you are analyzing current AR, Costpoint Analytics calculates the current age of the AR amount associated with an invoice as of the current date:
Age in days for the AR current period = Current date – Invoice date
If you are analyzing AR for historical periods, Costpoint Analytics calculates the age of each AR amount as of the period end dates:
Age in days for a prior period = Period end date – Invoice date
Invoices for which full payment was received in a period are not included in the AR aging data for that period.
If your firm ages invoices from the due date, Costpoint Analytics uses due dates rather than invoice dates in these calculations.
The current period for AR analysis is the fiscal period in which the current date falls. That period may be different than the current period for the other project analytics.
If the data load process loads invoices that were posted to a fiscal period later than the AR current period, regardless of their invoice date or due date, they are given an age of 0 days old, but they are assigned to a special Future aging range.
Future AR amounts are only displayed in the analytics if you include the AR current period in the analysis. If the analysis period does not include the AR current period, future AR amounts are excluded. You can also exclude them by selecting all aging ranges except Future in the Invoice Aging Ranges filter list.
Note: Invoices that are posted to the AR current period but have an invoice date later than the current date are given an age of 0 days old, but they are included in the "current" aging range, not the Future range. Only invoices posted to a future fiscal period are included in the Future range.
How Costpoint Analytics calculates DSO values depends on two decisions your firm makes during the configuration process:
Calculate DSO using revenue amounts or using billing amounts?
Include unbilled in the calculation?
Depending on those decisions, your DSO formula will be one of the following:
AR / (Billing for prior 3 periods / 90)
AR / (Revenue for prior 3 periods / 90)
(AR + Unbilled) / (Billing for prior 3 periods / 90)
(AR + Unbilled) / (Revenue for prior 3 periods / 90)
If you include unbilled in DSO, Costpoint Analytics calculates unbilled using inception-to-date (ITD) revenue and billing:
Unbilled = ITD revenue – ITD billing
Your firm calculates DSO using billing amounts and does not include unbilled in the calculation. If your firm's current accounts receivable balance is 1,000,000 and total billing for the prior three periods is 2,250,000, the DSO is 40.0:
1,000,000 / (2,250,000 / 90) = 40.0
If your firm bases the DSO calculation on billing, Costpoint Analytics uses the sum of billing amounts for invoices with a posting date in the prior three fiscal periods.
For the AR and DSO Analytics, two configuration options affect the DSO calculation if you include revenue or unbilled in the calculation:
Revenue amounts used in Costpoint Analytics can be calculated using either actual or target rates. During the configuration process for Costpoint Analytics, your system administrator selects the option your firm will use. That selection applies to all analytics that either display revenue amounts or use them to derive other values.
If your firm uses the Interim/Final Rates feature in Costpoint and includes prior year revenue adjustments in the Project Status Report (PSR) reporting tables, revenue amounts may include those prior year adjustments. A Costpoint Analytics configuration option controls whether the adjustments are included and, if they are, which fiscal periods are affected. For more information, see Adjustment Period.
No revenue amounts are loaded into the data model for fiscal periods later than the current period for the other project analytics. As a result, if the analysis period for the AR and DSO Analytics includes later periods, Costpoint Analytics cannot calculate meaningful unbilled amounts for those later periods because that calculation depends on having current revenue amounts. Instead, Costpoint Analytics displays a dash (–) in tables in place of unbilled amounts for those periods.
This also affects DSO calculations for those later periods if revenue or unbilled are included in the DSO calculations:
If you calculate DSO using billing rather than revenue and you do not include unbilled, DSO values for those later periods are accurate.
If you calculate DSO using billing rather than revenue and you do include unbilled, DSO values for those periods are calculated but may not be accurate because no unbilled amounts are available for those periods.
If you calculate DSO using revenue rather than billing, Costpoint Analytics cannot calculate meaningful DSO values for those periods because of the missing revenue amounts. In that case, Costpoint Analytics displays a dash (–) in tables in place of the DSO values for those periods.
The lowest level that unbilled and DSO values are calculated is the top project level. If you make selections in either the Invoice Aging Ranges list or the Invoice ID list, the analytics are filtered at the invoice level, so meaningful unbilled and DSO values cannot be calculated. In that case, Costpoint Analytics does not display a chart line for DSO in the Trending AR with DSO chart and displays dashes (–) instead of unbilled and DSO values in the Unbilled and DSO by Attribute table and the Trending DSO Detail table.
The organization access that your system administrator sets up for your Costpoint Analytics user role determines the organizations for which you can view analytic information:
The Owning Org list does not include organizations to which you do not have access.
Summarized amounts for higher level organizations only include amounts for the organizations to which you have access. As a result, amounts for an organization may be partial amounts if you do not have access to all lower level organizations below it in the organization hierarchy.
If you select the Reorg option on the User Options tab so that you can filter the analytics by reorganization, the organization access set up for your Costpoint Analytics user role also determines your access to reorganizations:
The Owning Reorg list does not include reorganizations to which you do not have access.
You do not have access to a reorganization if you do not have access to any of the organizations mapped to that reorganization.
You have access to a reorganization if you have access to at least one organization mapped to that reorganization. However, amounts for a reorganization may be partial amounts if you do not have access to all organizations mapped to that reorganization.
Summarized amounts for higher level reorganizations only include amounts for the reorganizations to which you have access. As a result, amounts for a reorganization may be partial amounts if you do not have access to all lower levels.
For more information on filtering the analytics by organization or reorganization, see Filter by Organization or Reorganization. For more information on selecting the option to filter by reorganization on the User Options tab, see Organization or Reorganization.
Your system administrator specifies the number of prior fiscal periods for which data is available. Use the calendar bars across the top of the tab to change the analysis period reflected in the charts and tables on the AR and DSO tab.
For more information on specifying the analysis period, see Specify an Analysis Period.
While Costpoint Analytics is not designed to do year-over-year comparisons, you can use the Trending AR by Aging Ranges chart and the Trending AR with DSO chart to compare values for more than one year.
For example, if you select two complete fiscal years for the analysis period, those charts display trending data across those two years. If you select two fiscal years and just select the third fiscal period, the charts display values as of the end of that period for each year.
Your selections on the User Options tab affect the AR and DSO Analytics in the following ways:
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User Option |
Effect on the Analytics |
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Budget Type |
These analytics do not use budget data, so this option has no effect on them. |
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Org or Reorg |
If you select Org, you can filter and analyze AR and DSO by organization. If you select Reorg, you can do so based on the selected reorganization. The name and contents of the filter list and cycle options change to reflect your current selection. For more information on this user option, see Organization or Reorganization. |
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Org View |
This option does not apply to the AR and DSO Analytics. AR and DSO analysis is always by owning organization. |
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Profit Type |
These analytics do not use profit amounts, so this option has no effect on them. |