Accounts Receivable Aging Report

Accounts Receivable Aging Report

An aging report is a document that provides the unpaid invoices as well as the duration for which the accounts receivable are outstanding. It helps you to monitor and manage the due and overdue payments as well as track slow-paying customers.

In this article, we'll discuss in detail :

  • What is Accounts Receivable Aging Report?

  • Why is an Aging Report important?

  • How to prepare an Aging Report?

  • How can an Aging Report help your business?


What is Accounts Receivable Aging Report? 

'Aging' here refers to the process of organizing accounts receivable by their due payment date. It is called an aging report as it provides the total outstanding accounts receivable sorted into their age categories.

As we know, accounts receivable are the debts owed to the company that provides their customers services/products on a credit. Therefore, business companies and organizations prepare aging reports regularly to help them collect their receivables as quickly as they can.

Aging reports can vary in detail with different businesses, although the purpose remains the same. The outstanding accounts receivable are sorted into columns depending on the company's aging schedule such as 1-15 days, 15-30 days, 30-45 days, etc.


Why is an Aging Report important? 

As a business, you need to stay on top of your cash flow as well as manage your company's finances. Therefore, it is important to prepare aging reports that can help you monitor outstanding receivables and keep track of your customers.

Receiving your collections late can be an issue for your business as they can interrupt the cash flow. According to a recent survey, it has been found that 93% of businesses have suffered from late payments, causing a disruption to their cash flow where 40% of them had to delay payments to their suppliers. This could impact your supply chain and you will not be able to afford supplies for your business to grow.

Therefore, aging reports can help you know when to stop providing services/products to customers before late payments become an issue and you will write them off as bad debts. It will make identifying bad credit risks to your business easier and save your finances.

Aging reports can help you analyze your customers' payment history and track their late payments to adjust the collection practices to improve the debt recovery rate and average DSO. This can also aid in aligning the invoice timeline to your customer's payment history.


How To Prepare An Aging Report? 

To prepare an aging report, you will need details such as your customers' names, their outstanding balance amounts, and aging timelines.

Start with reviewing all the outstanding invoices. Sort them according to their outstanding due amounts as well as the number of days their invoices are due. You can customize these details as per the aging schedule requirements.

You can refer to this common aging schedule chart here to prepare an aging report:


Time Interval

Due Date


Due on the same day

0-30 Days

Due within 0-30 days

31-60 Days

Due within 31-60 days

61-90 Days

Due within 61-90 days

>90 Days

Due after 90 days


Once you have prepared an aging report, you'll be able to monitor late-paying customers and their outstanding dues. This will then make it easier for you to take the next action, whether to send a follow-up invoice or withhold your services till the dues are cleared.


How Can An Aging Report Help Your Business? 

Here are 5 ways an aging report can help maintain your company's finances and stay on top of your cash flow.

Let Go Of Non-Paying Customers

With an aging report, you can easily monitor the customers who regularly struggle to pay or do not pay their dues. Hence, it's best to discontinue providing them with your services/products and stop cash flow delay to your business.

Identify Bad or Doubtful Debts

Businesses can use an aging report to identify bad and doubtful debts which include dues that may not be collected. These bad debts should be identified and written off in financial statements for each period.

Improve Your Credit Terms & Policies

If you notice a significant number of bad debts or customers with overdue payments during a period, then you might need to revisit your credit terms and policies. You will have to make the required changes in it as per the industry standards so that you don't face this situation again. Also, make sure to review the dunning workflows and follow-up strategies you use.

Actively Focus On High-Paying Customers

You can gain insightful information about your customers' payments with an aging report. With the information in hand, you can filter customers who owe you the most payments and focus more on following up with them regularly.

Modify Your Collection Strategies

An aging report can help plan and strategize your collection practices better. It will help you track older receivables and analyze unpaid invoices. You can alter your collection methods so that you get your outstanding dues on time.

Accounts Receivable Automation Software like Maxyfi can help improve your collection strategies, making them efficient and effective. They also provide customizable templates and embedded payment systems, making debt recovery faster and easier.

Speaking of aging reports, Maxyfi provides a rich intuitive dashboard where you can monitor and generate an aging report or summary in just a few minutes!

To automate with Maxyfi, Get started here.



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