Aged Receivables (Aging Report)

A report categorizing outstanding customer invoices by how long they have been unpaid, typically in 30-day buckets.

An Aged Receivables Report (or Aging Report) categorizes all unpaid customer invoices by the number of days they have been outstanding. It is the primary tool for managing collections and assessing credit risk.

Standard aging buckets:

  • Current (0-30 days): Within payment terms, no action needed
  • 31-60 days: Mildly overdue, send payment reminder
  • 61-90 days: Significantly overdue, escalate collection efforts
  • 91-120 days: Seriously overdue, consider putting account on hold
  • 120+ days: May require provisioning, legal action, or write-off

Why aging reports matter:

  • Cash flow management: Identify potential shortfalls before they happen
  • Provisioning: Estimate bad debts for financial reporting (Ind AS 109 / ECL model)
  • Customer credit decisions: Restrict credit for chronic late payers
  • Collection prioritization: Focus efforts on highest-value overdue invoices

Indian accounting standards: Under Ind AS 109, businesses must use the Expected Credit Loss (ECL) model based on aging data to provision for doubtful debts. The aging report directly feeds into this calculation.

Related Terms

DSO (Days Sales Outstanding)

A financial metric measuring the average number of days it takes a business to collect payment after a sale is made.

Cash Flow (Statement & Management)

The movement of money in and out of a business, tracked through the Cash Flow Statement showing operating, investing, and financing activities.

DPO (Days Payable Outstanding)

A financial metric measuring the average number of days a business takes to pay its suppliers after receiving an invoice.

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