Aging Report
Report showing unpaid invoices grouped by how long they've been outstanding.
Definition
An aging report (or accounts receivable aging) categorizes unpaid invoices by age: 0-30 days, 31-60 days, 61-90 days, and over 90 days. It shows which customers owe money and how overdue their invoices are.
This report is essential for collections, cash flow management, and identifying slow-paying customers. Older invoices are harder to collect—the aging report helps prioritize collection efforts.
Why It Matters
Aging reports reveal cash flow problems before they become critical. If most receivables are over 60 days, you need to improve collection processes or reassess customer creditworthiness.
Lenders and investors scrutinize aging reports to assess credit risk. High levels of old receivables suggest collection problems or customers in financial distress.
Examples
- 1
Aging report shows: $50,000 current (0-30 days), $20,000 31-60 days, $10,000 over 60 days—focus collection efforts on the $10,000.
- 2
A business sees 40% of receivables over 90 days—implements stricter payment terms and deposits for new customers.
- 3
Using the aging report to identify: Customer X consistently pays 60+ days late—require prepayment or COD for future orders.
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