How does Sage Accounting categorize outstanding supplier debts?

Sage Accounting categorizes outstanding supplier debts primarily by age, which is an essential aspect of managing accounts payable. This categorization allows businesses to monitor and assess how long invoices have been outstanding and aids in prioritizing which debts need immediate attention. By analyzing outstanding debts based on their age, organizations can identify overdue accounts, manage cash flow better, and make informed decisions regarding payments.

Using age categories helps in assessing credit risk and ensuring timely payments to suppliers, thereby maintaining good relationships. Ageing reports can outline debts in ranges such as current, 1-30 days overdue, 31-60 days overdue, and so on, providing a clear overview of outstanding financial obligations. This method is instrumental for effective financial management, making it the correct approach used by Sage Accounting for categorizing outstanding supplier debts.

The other options, such as financial year, supplier product type, and geographical location, do not reflect the immediacy and relevance of tracking payment periods which is crucial in managing supplier relationships and liquidity.