How aging report works
An accounts receivable aging report shows which customers owe money and how overdue each invoice is, which helps a business decide who to follow up with first. An accounts payable aging report works the same way in reverse, showing which vendor bills are coming due or already late. Some businesses also break the report down by sales representative or region to spot patterns in collection performance.
Reviewing the aging report regularly, often weekly, helps catch slow-paying customers early before the balance grows too large to collect. It also feeds directly into the allowance for doubtful accounts and supports decisions about which accounts need a stronger collections effort or a credit hold. A sudden jump in the 60 or 90 day buckets is often the first warning sign that a customer relationship or a specific invoice needs attention.
Example
A supplier's aging report shows $3,000 current, $1,500 in the 30 day bucket, $800 in the 60 day bucket, and $200 in the 90 day bucket, for total receivables of $5,500. The $200 balance in the 90 day bucket gets a phone call that day, since invoices that old are the most likely to go unpaid.
Aging report in QuickBooks Online vs Xero
QuickBooks Online generates an A/R aging summary and A/P aging summary under Reports, updated automatically as invoices and bills are entered. Xero offers the same reports under Accounting, called Aged receivables and Aged payables, both filterable by customer or vendor and exportable for a collections call list. Both tools also let you filter the aging report by customer, making it easy to prepare for a specific collections call.
Related terms
How LedgerBPO handles aging report
We review your aging report every week, not just at month end, so overdue invoices get a reminder before they age into the riskiest buckets. A dedicated accountant follows a set cadence for calls and emails through our DunningDesk process. You get faster collections and fewer invoices written off. We prioritize accounts moving into the older buckets first, since those balances are the hardest to collect the longer they sit.