AR Aging Report
A report categorizing accounts receivable by how long invoices have been outstanding.
Definition
An AR (Accounts Receivable) aging report categorizes all outstanding invoices by how long they've been unpaid. Standard categories are: Current (not yet due), 1-30 days past due, 31-60 days, 61-90 days, and 90+ days. This report provides a clear view of collection health and identifies problem accounts.
Aging reports are essential management tools. They show total receivables by age bucket, highlight specific accounts requiring attention, and track trends over time. Regular review (weekly or monthly) helps maintain healthy collections and catch issues early.
Why It Matters
AR aging reveals collection problems before they become crises. An account that's 45 days overdue is much easier to collect than one that's 120 days overdue—but you can't act if you don't know. Regular aging review enables proactive collection efforts.
Aging data also informs business decisions. Rising 90+ day balances might signal economic changes affecting customers, inadequate credit policies, or collection process failures. Trending data helps you respond appropriately.
Examples
- 1
A monthly AR aging shows: Current ($50,000), 1-30 days ($20,000), 31-60 days ($8,000), 61-90 days ($3,000), 90+ days ($2,000).
- 2
A CFO notices the 31-60 day bucket growing monthly and implements more aggressive 30-day follow-up.
- 3
A collection manager prioritizes daily outreach starting with the largest 60+ day balances.
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