What is the purpose of "Aging Analysis" in GFEBS Debt Management?

What is the purpose of "Aging Analysis" in GFEBS Debt Management?

• A. To establish new credit policies
• B. To categorize debts based on their due dates
• C. To update debtor contact information
• D. To evaluate interest rate changes

Answer: (B)

The purpose of "Aging Analysis" in GFEBS Debt Management is to categorize debts based on their due dates. By analyzing the age of debts, organizations can see how long each debt has been outstanding, which helps in monitoring overdue accounts and prioritizing collection efforts. This categorization aids in understanding the financial health of the organization, as it highlights which debts are becoming problematic or may require immediate attention. Aging analysis provides valuable insights into cash flow management and helps identify trends in payment behavior, allowing for more informed decision-making regarding collections and credit management.

The purpose of "Aging Analysis" in GFEBS Debt Management is to categorize debts based on their due dates. By analyzing the age of debts, organizations can see how long each debt has been outstanding, which helps in monitoring overdue accounts and prioritizing collection efforts. This categorization aids in understanding the financial health of the organization, as it highlights which debts are becoming problematic or may require immediate attention. Aging analysis provides valuable insights into cash flow management and helps identify trends in payment behavior, allowing for more informed decision-making regarding collections and credit management.