What method of bad debt estimation categorizes individual accounts receivable based on the length of time outstanding?

Question:

What method of bad debt estimation categorizes individual based on the length of time outstanding? Why is this length of time an important factor?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...