ACCOUNTS RECEIVABLE

    Accounts Receivable Aging Report

    DEFINITION

    An accounts receivable (AR) aging report is a financial document that groups unpaid customer invoices by how long they have been outstanding — typically Current, 1–30, 31–60, 61–90, and 90+ days. It is the primary tool for spotting collection risk and prioritizing follow-up.

    Standard aging buckets

    • Current — not yet due
    • 1–30 days past due — gentle reminder territory
    • 31–60 days — escalate, phone outreach
    • 61–90 days — formal demand, pause new work
    • 90+ days — collections, factoring, or write-off candidate

    How to use the report

    Run AR aging weekly. Sort by amount within each bucket and focus the top 20% of overdue value first — that's usually 80% of your cash risk. Pair the report with an automated reminder schedule so the <30-day bucket clears itself.

    Aging report and bad debt

    Most accountants apply estimated bad-debt percentages to each bucket (e.g., 1% Current, 5% 1–30, 15% 31–60, 30% 61–90, 50%+ 90+). The weighted total becomes your allowance for doubtful accounts.

    Frequently asked questions

    Related

    DSODunningBad Debt

    More in Accounts Receivable

    Days Sales Outstanding (DSO)

    Days Sales Outstanding (DSO) is the average number of days a business takes to collect payment after a sale on credit. It is calculated as (Accounts Receivable ÷ Total Credit Sales) × Number of Days. A lower DSO means faster cash collection and healthier working capital.

    Dunning

    Dunning is the structured process of communicating with customers to collect overdue invoices. It typically combines automated email reminders, phone calls, and escalation letters at fixed intervals (e.g., 3, 7, 14, and 30 days past due) before referring the debt to collections.

    Accounts Receivable

    Accounts Receivable (AR) is the total money a business is owed by customers for goods or services delivered on credit but not yet paid. It appears as a current asset on the balance sheet and is one of the most important indicators of short-term cash flow health.

    Free tool

    Automate your AR follow-ups

    Generate a complete reminder schedule with email copy in 30 seconds.

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