AR Ageing and Expected Collection Review: Revenue-to-Cash Control File
Receivables are not cash. A good AR ageing file tells which invoices are collectible, disputed, delayed, doubtful or wrongly billed.
For the connected rule, example or next step, see Provisions and Contingent Liabilities: AS 29 Year-End File.
Detailed analysis
Receivables affect revenue quality, working capital and audit risk. The controller should connect invoices, contract terms, collection history, disputes, credit notes and management assessment before presenting AR as recoverable.
Practical example
A SaaS company shows ₹1.8 crore receivables. Ageing reveals ₹42 lakh older than 180 days, including ₹18 lakh disputed implementation invoice. Finance prepares collection probability note, customer emails, credit-note assessment and provision recommendation.
Evidence and control checklist
| Area | What to check | Evidence to save |
|---|---|---|
| Invoice ageing | Bucket-wise receivables by customer and due date. | AR ageing report and invoice register. |
| Collection evidence | Subsequent receipts and customer confirmations. | Bank receipts and collection tracker. |
| Disputes and credits | Rejected invoices, service issues and credit notes. | Customer email, credit-note approval and legal note. |
| Provision assessment | Doubtful debts and expected recovery. | Management assessment and provision working. |
| Revenue tie-out | Revenue recognised vs invoice and cash. | Contract-to-invoice-to-cash bridge. |
For the connected rule, example or next step, see Full and Final Settlement: TDS, PF, ESIC, Leave and Gratuity Control File.
Common mistakes
- Reporting gross AR without ageing review.
- Ignoring disputed invoices in MIS.
- No subsequent collection testing.
- No customer-wise owner for overdue balances.
- Not considering provision/write-off for doubtful balances.
Official reference framework
Based only on official India Code, MCA and ICAI source pages listed below. Check the latest Companies Act, Schedule III, accounting standards, Ind AS/AS applicability and auditor guidance before closing or filing.
Official sources used
This article is intentionally source-limited to official India Code, MCA and ICAI material. Source validation date: 17 June 2026. Verify final positions with latest Companies Act, Schedule III, accounting standards, Ind AS/AS applicability and auditor guidance before closing or filing.
- India Code: Companies Act, 2013 Section 128 - Books of account
- India Code: Companies Act, 2013 Section 129 - Financial statement
- India Code: Schedule III to the Companies Act, 2013
- ICAI: Engagement and Quality Control Standards - Complete Text
FAQs
A report that groups receivables by how long they are outstanding.
Uncollectible receivables can overstate assets and revenue quality.
Invoices, contracts, customer confirmations and subsequent collections.
Yes. Disputed invoices require separate assessment.
AR/collections owner with controller review.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Business Case Studies & Corporate Strategy
- Official starting point
- www.mca.gov.in
See “Official sources used” above for the Companies Act, Schedule III and ICAI references used in this article.