| Account Number ↓ | Account Name | Description | Account Type | Account Sub Type | FS Caption | Total |
|---|
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Accounts Selection
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Your inquiries
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Inquiry Information
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AR Process Understanding
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AR Listing and Reconciliation Review
CLA reviewed the AR listing and reconciliation for items below. Please note all fields are required.
Analytics
Perform the following substantive trend analysis. The analytics combined with the test of details is designed to reduce the risk of material misstatement to an acceptably low level for the selected assertions.
Aging Analysis
The following AI-powered analysis reviewed differences and status for each age range compared with prior year.
| Age Range (Days) ↓ | 2025 | 2024 | 2023 |
|---|---|---|---|
| 0-30 | $ 8,567,432 73% | $ 7,204,568 64% | $ 6,450,250 58% |
| 31-60 | $ 1,875,629 16% | $ 2,262,348 20% | $ 2,227,980 20% |
| 61-90 | $ 854,375 7% | $ 1,130,427 10% | $ 1,335,740 12% |
| Over 90 days | $ 467,921 4% | $ 678,256 6% | $ 1,112,430 10% |
| Total | $ 11,765,357 100% | $ 11,275,599 100% | $ 11,126,400 100% |
Further Analysis
Trial Balance$ 11,758,932$ 11,269,875$ 11,122,150
Differences$ 6,425$ 5,724$ 4,250
Ratio Analysis
Key ratios assessing receivables performance, turnover efficiency, and overall collection trends over the past three years.
| Ratio ↓ | 2025 | 2024 | 2023 | Comments AI |
|---|---|---|---|---|
| A/R Turnover | 6.82 | 6.45 | 6.20 | The accounts receivable turnover ratio has improved from 6.20 in... |
| Age of AR (Days) | 53.5 | 56.6 | 58.9 | The average collection period decreased from 58.9 days in 2023 t... |
AI Comment The average age of AR decreased year over year, which supports the conclusion that collection activity has improved and older balances are being resolved more quickly. | ||||
| Allowance / Credit Sales | 1.20% | 1.30% | 1.50% | The allowance for doubtful accounts as a percentage of credit sale... |
AI Comment The allowance ratio declined modestly, consistent with improved customer collections and fewer delinquent balances requiring reserve coverage. | ||||
| Allowance / Total Receivables | 3.80% | 4.20% | 4.70% | The allowance as a percentage of total receivables declined from 4... |
AI Comment The reserve as a percentage of total receivables declined steadily. This is directionally consistent with the aging improvement noted in the 0-30 day bucket. | ||||
| Bad Debt Expense / Credit Sales | 0.90% | 1.10% | 1.40% | The bad debt expense ratio decreased from 1.4% in 2023 to 0.9%... |
AI Comment Bad debt expense as a percentage of credit sales decreased each year, supporting management's assertion that credit risk has not increased. | ||||
| % Increase in AR | (14.50%) | (8.30%) | 2.70% | Accounts receivable decreased by 14.5% in 2025 following moder... |
AI Comment The decrease in AR is reasonable when compared with improvements in collections and the absence of large new delinquent customer balances. | ||||
| AR / Current Assets | 32.40% | 34.80% | 36.30% | AR represents 32.4% of current assets in 2025, down from 36.3% i... |
AI Comment AR remains a significant current asset balance but is trending down as a percentage of current assets, which is consistent with improved conversion to cash. | ||||
| AR / Total Assets | 18.70% | 19.50% | 20.20% | The ratio of AR to total assets declined from 20.2% in 2023 to 18... |
AI Comment The decline in AR as a percentage of total assets appears reasonable and does not indicate unexpected balance sheet concentration. | ||||
| AR / Net Worth | 42.80% | 46.50% | 50.30% | The proportion of AR to net worth improved from 50.3% in 2023 to... |
AI Comment The AR to net worth ratio improved across the period, indicating lower relative exposure and supporting the overall trend analysis conclusion. | ||||
Sales Correlation Analysis
The table below shows sales analysis to give quick context on alignment with business activity.
| Accounts Receivable Projection ↓ | 2025 | 2024 | 2023 |
|---|---|---|---|
| October - December Sales | $ 20,764,350 | $ 19,856,200 | $ 18,475,900 |
| Avg. Daily Sales (Based on 92 days) | $ 225,699 | $ 215,828 | $ 200,825 |
| Approx. A/R Balance (Note Turn Above) | $ 11,825,745 | $ 11,364,290 | $ 11,105,320 |
| $ Difference from Actual | ($ 67,187) | ($ 88,691) | ($ 23,170) |
| % Difference from Actual | (0.6%) | (0.8%) | (0.2%) |
Data Selection
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The accounts receivable turnover ratio has improved from 6.20 in 2023 to 6.82 in 2025, indicating faster collections and better working capital performance. The trend is consistent with management's implementation of new collection procedures.