Accounts receivable aging report: What it is and how to use it

Late payments are more than just a headache, they can put real pressure on cash flow. QuickBooks reports that nearly half of small businesses have invoices overdue beyond 30 days, leaving finance teams chasing payments and struggling to plan ahead.

That’s where an accounts receivable aging report comes in. It shows exactly who owes money and how long payments have been overdue. This helps finance teams chase late payments easily and gives them the insight to make better financial decisions.

In this article, we’ll cover everything you need to know about an accounts receivable aging report – including why it matters, how to create one, and best practices to follow.

What is an accounts receivable aging report?

An accounts receivable aging report shows all your unpaid invoices and sorts them by how long they’ve been outstanding. It typically breaks balances into the following buckets:0–30 days

• 31–60 days

• 61–90 days

• Over 90 days

This helps teams understand which invoices are overdue, making it easier to know which payments to chase.

Why accounts receivable aging reports matter for finance teams

The report allows finance teams to:

• See when cash is likely to come in

• Identify which accounts to chase first

• Spot potential debt

• Prepare for their next audit

Revenue may look good on paper, but if too many invoices slip into the 60+ or 90+ buckets, Days Sales Outstanding (DSO) rises and cash flow can take a hit.

Now we know what an AR aging report looks like, read our full article to look at how to prepare one. 

https://blog.approvalmax.com/accounts-receivable-aging-report-what-it-is-and-how-to-use-it-for-better-cash-flow