How to Use Excel Aging Formula for 30 60 90 Days (with Free Download)
Do you want to know how to use Excel aging formula for 30 60 90 days? If yes, then you are in the right place. In this article, we will show you how to apply this formula in different ways and what benefits it can bring to your business. We will also provide you with a free download of an Excel aging formula template that you can use right away.
What is Excel Aging Formula and Why You Need It
Excel aging formula is a formula that calculates the number of days between a given date and the current date. It is often used to analyze the age of accounts receivable, which are the amounts owed by customers to a business. By using this formula, you can categorize your accounts receivable into different buckets based on how long they have been outstanding. For example, you can group them into 30, 60, and 90 days buckets.
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This is useful because it helps you to monitor the health of your cash flow and the quality of your customers. You can see which customers are paying on time, which ones are late, and which ones are at risk of defaulting. You can also use this information to take appropriate actions, such as sending reminders, offering discounts, or imposing penalties.
How Excel Aging Formula Works
The basic formula for calculating the age of an account in Excel is:
=TODAY()-date
Where date is the cell reference that contains the date of the invoice or payment. This formula returns the number of days between the current date and the date in the cell. For example, if the date in cell A2 is January 1, 2023, and today is June 20, 2023, then the formula will return:
=TODAY()-A2
=44171-44101
=70
This means that the account is 70 days old as of today.
How to Apply Excel Aging Formula for 30 60 90 Days
There are different ways to apply Excel aging formula for 30 60 90 days. Here are some of the most common methods:
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Excel ageing formula
Method 1: Using Conditional Formatting
One way to use Excel aging formula for 30 60 90 days is to use conditional formatting. This feature allows you to apply different formats to cells based on certain criteria. For example, you can highlight cells that are older than 90 days with red color, cells that are between 60 and 90 days with yellow color, and cells that are between 30 and 60 days with green color.
To do this, follow these steps:
Select the range of cells that contain the dates.
Go to Home tab > Conditional Formatting > New Rule.
Select Use a formula to determine which cells to format.
In the Format values where this formula is true box, enter the following formula:
=AND(TODAY()-A2>=90,A2<>\"\")
Click Format and choose a red color from the Fill tab.
Click OK.
Repeat steps 2 to 6 for the other two criteria, using these formulas:
=AND(TODAY()- A2>=60,A2"")
=AND(TODAY()-A2>=30,A2"")
Choose a yellow color and a green color respectively for the formats.
Click OK.
Now you will see that the cells are colored according to their age. You can also add a legend to explain the meaning of the colors.
Method 2: Using IF Function
Another way to use Excel aging formula for 30 60 90 days is to use IF function. This function allows you to return different values based on a logical test. For example, you can return the text "Overdue" if the account is older than 90 days, "Due Soon" if it is between 60 and 90 days, and "Current" if it is between 30 and 60 days.
To do this, follow these steps:
Select a cell next to the date column and enter the following formula:
=IF(TODAY()-A2>=90,"Overdue",IF(TODAY()-A2>=60,"Due Soon",IF(TODAY()-A2>=30,"Current","")))
Copy and paste the formula to the rest of the cells in the column.
Adjust the column width to fit the text.
Now you will see that the cells display the status of the accounts based on their age. You can also apply different formats to the text, such as font color, size, or style.
Method 3: Using DATEDIF Function
A third way to use Excel aging formula for 30 60 90 days is to use DATEDIF function. This function calculates the difference between two dates in various units, such as days, months, or years. For example, you can calculate the number of months between the invoice date and the current date.
To do this, follow these steps:
Select a cell next to the date column and enter the following formula:
=DATEDIF(A2,TODAY(),"m")
Copy and paste the formula to the rest of the cells in the column.
Format the cells as numbers with no decimal places.
Now you will see that the cells show the number of months between the invoice date and the current date. You can also use other units for the DATEDIF function, such as "d" for days, "y" for years, or "ym" for months excluding years.
Method 4: Using VLOOKUP Function
A fourth way to use Excel aging formula for 30 60 90 days is to use VLOOKUP function. This function allows you to look up a value in a table and return a corresponding value from another column. For example, you can create a table that defines the age ranges and their corresponding categories, such as:
Age Range Category --------------------- =90 Overdue Then you can use VLOOKUP function to match the age of each account with its category.
To do this, follow these steps:
Create a table like the one above in another sheet or range of cells.
Select a cell next to the date column and enter the following formula:
=VLOOKUP(TODAY()-A2,Table,2,TRUE)
Replace Table with the reference of your table range or name.
Copy and paste the formula to the rest of the cells in the column.
Now you will see that the cells display the category of each account based on its age. You can also format the cells as text or apply conditional formatting to them.
Method 5: Using Pivot Table
A fifth way to use Excel aging formula for 30 60 90 days is to use pivot table. This feature allows you to summarize and analyze data in various ways. For example, you can create a pivot table that shows the total amount of accounts receivable by age category.
To do this, follow these steps:
Add a column next to the date column and enter any of the formulas from methods 1 to 4 to calculate the age category of each account.
Select all the data columns, including the new column.
Go to Insert tab > PivotTable.
In the Create PivotTable dialog box, choose a location for the pivot table, such as a new worksheet or an existing worksheet.
Click OK.
In the PivotTable Fields pane, drag the age category column to the Rows area, the amount column to the Values area, and the date column to the Filters area.
Right-click on any cell in the Values area and choose Summarize Values By > Sum.
Right-click on any cell in the Rows area and choose Sort > Z to A.
Optionally, you can format the pivot table as you like, such as adding a title, changing the number format, or applying a style.
Now you will see a pivot table that shows the total amount of accounts receivable by age category. You can also filter the data by date or by any other criteria you want.
Benefits of Using Excel Aging Formula for 30 60 90 Days
Using Excel aging formula for 30 60 90 days can bring many benefits to your business. Here are some of them:
Improve Cash Flow Management
By using Excel aging formula for 30 60 90 days, you can improve your cash flow management. You can see how much money you have coming in and how much money you have going out. You can also forecast your cash flow based on the expected payment dates of your customers. This way, you can plan your budget and avoid cash flow problems.
Identify Delinquent Accounts
By using Excel aging formula for 30 60 90 days, you can identify delinquent accounts. You can see which customers are overdue and by how much. You can also prioritize your collection efforts and focus on the most urgent cases. This way, you can reduce your bad debt and improve your recovery rate.
Analyze Customer Payment Behavior
By using Excel aging formula for 30 60 90 days, you can analyze customer payment behavior. You can see which customers are paying on time, which ones are paying late, and which ones are paying early. You can also segment your customers based on their payment patterns and preferences. This way, you can tailor your communication and marketing strategies to suit their needs and expectations.
Optimize Credit Policy
By using Excel aging formula for 30 60 90 days, you can optimize your credit policy. You can evaluate the effectiveness of your current credit terms and conditions. You can also test different scenarios and see how they affect your cash flow and profitability. This way, you can find the optimal balance between extending credit and minimizing risk.
Free Download of Excel Aging Formula Template
If you want to save time and effort, you can download our free Excel aging formula template. This template contains all the methods we have discussed in this article, as well as some additional features, such as charts, filters, and slicers. You can easily customize it to suit your own data and preferences.
To download the template, click on this link: [Excel Aging Formula Template]
Conclusion
In this article, we have shown you how to use Excel aging formula for 30 60 90 days. We have explained what it is, how it works, and how to apply it in different ways. We have also discussed the benefits of using it and provided you with a free download of an Excel aging formula template.
We hope you have found this article helpful and informative. If you have any questions or feedback, please feel free to leave a comment below. Thank you for reading!
FAQs
Here are some frequently asked questions about Excel aging formula for 30 60 90 days:
What is the difference between aging analysis and aging report?
Aging analysis is the process of calculating the age of accounts receivable and categorizing them into different buckets based on their due dates. Aging report is the output of aging analysis that shows the summary of accounts receivable by age category.
How do I change the date format in Excel?
To change the date format in Excel, select the cells that contain the dates and go to Home tab > Number group > drop-down arrow > More Number Formats > Date. Then choose a date format from the list or create a custom one.
How do I refresh a pivot table in Excel?
To refresh a pivot table in Excel, right-click on any cell in the pivot table and choose Refresh. Alternatively, you can go to Analyze tab > Data group > Refresh All.
How do I create a chart from a pivot table in Excel?
To create a chart from a pivot table in Excel, select any cell in the pivot table and go to Analyze tab > Tools group > PivotChart. Then choose a chart type from the list and customize it as you like.
How do I protect my Excel file from unauthorized access or modification?
To protect your Excel file from unauthorized access or modification, go to File tab > Info > Protect Workbook. Then choose an option from the list, such as Encrypt with Password, Protect Current Sheet, or Protect Workbook Structure. Enter a password and confirm it. Click OK.
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