Accounts receivable aging report: Definition, uses, and guide

As a small business owner, few things are more frustrating than not getting paid. Small businesses in the US collectively own a staggering $825 billion in unpaid invoices, which is equal to 5% of the nation's GDP. 

That's where an accounts receivable aging report comes in. This report categorizes unpaid customer invoices by how long they've been outstanding, helping you identify late-paying customers and set appropriate payment terms.

To help you get started, we’re answering your common questions and addressing the basics of accounts receivable aging reports.

What does an accounts receivable aging report show you?

Why accounts receivable aging reports are important

How to create an AR aging report

Best ways to use an AR aging report

Run your business with confidence

What does an accounts receivable aging report show you?

An accounts receivable aging report, also known as an aging schedule, will include unpaid invoices from your accounts receivable (A/R). You group your customer invoices into date ranges rather than listing specific dates for when an invoice is due. The aging schedule helps you quickly see how long invoices have been outstanding so you can prioritize collections.

If you’re just learning how to calculate accounts receivable, aging reports are a good place to start—they give you the data you need to measure how efficiently you’re collecting payments.

Invoice date ranges commonly found on an aging schedule include:

• Current: Invoices not past due
• 1–30 days: Past due for 1–30 days
• 31-60 days: Past due for 31–60 days
• 61–90 days: Past due for 61–90 days
• 91+ days: Past due for 91 or more days

You can customize these ranges to fit your business needs. The aging report helps you see who’s paying on time and who’s falling behind, giving you a clear picture of your cash flow and collections efforts.

Why accounts receivable aging reports are important

An accounts receivable aging report helps companies analyze their customers' outstanding invoices. It helps businesses maintain a healthy cash flow and identify credit risks.

Putting together regular accounts receivable aging reports, which you can easily do with invoicing software, allows you to identify regular late-paying customers. You can then avoid sending goods and services to customers before late payments become an issue and hamper cash flow.

AR aging reports are important because they can help businesses keep track of outstanding payments from customers. You can generate an accounts receivable aging report to calculate and improve your accounts receivable turnover ratio. 

You can also use these reports to guide your collections strategy and follow-up efforts. The image below shows an example of a call script you can use when contacting customers about late or missed payments. This visual serves as the accounts receivable aging report in action—helping you follow up effectively based on payment timelines.

This is also possible with QuickBooks software. ​​You can see which customers have past due balances in QuickBooks, and how long each transaction is past due. Go to reports in your software and visit the “Who owes you” section, then select “Accounts receivable aging detail.”

As a business owner, the last thing you want is to sell your products or services and receive payment late or not at all. That’s why it’s important to stay on top of your finances and keep track of who owes you to maintain your company’s financial health.

How to create an AR aging report

Preparing an accounts receivable aging report is relatively straightforward. To get started, follow these steps:

1. Gather unpaid invoices

In step one, you’ll gather all the unpaid invoices you have for customers. That’s any invoice with an open balance on it, even if it’s a partial balance. 

2. Calculate days past due

For each invoice, you’ll want to calculate the number of days past due. For example, if the invoice was due on the 15th and it’s now the 22nd, the invoice is seven days past due.

3. Categorize invoices

Next, you'll want to group each of the customer’s invoices according to the aging schedule. 

For example, a customer has the following unpaid invoices: 

• One invoice for $1,000 that is not past due
• Two invoices that total $1,500 and are 15 days overdue
• One invoice for $100 that is 37 days overdue 

You would then categorize those invoices based on your aging schedule ranges. A sample accounts receivable aging report would then be: 

• Current: $1,000
• 1–30 days: $1,500
• 31–60 days: $100

4. Create an aging schedule

You’ll list all your customers that have an open invoice and then do the same thing we did in step three for all your customers. Once complete, you can total the amounts to see how much of your invoices are current, 1-30 days past due, and so on. 

A/R aging reports aren’t perfect, however. For example, many business owners bill customers toward the end of the month. This can make an aging A/R report misleading because if a customer pays just a few days later, it can show up as past due on the report.

Best ways to use an AR aging report

An accounts receivable (AR) aging report is more than just a list of unpaid invoices. It’s a tool that gives you insight into how well you’re managing collections, credit, and cash flow. Here’s how to put it to work:

Manage cash flow

Cash flow keeps your business running, and an aging report helps you protect it. You can use it to quickly spot late payments, follow up with overdue customers, and take action to speed up collections. Addressing issues early reduces the risk of cash shortages down the line.

Estimate bad debt

Not every invoice gets paid. Your aging report helps estimate how much you may never collect, called bad debt so that you can plan accordingly.

Here’s how a business might calculate its allowance for doubtful accounts:

This $32,000 estimate can help you update your allowance for doubtful accounts and stay realistic about your expected income.

Adjust credit policies 

Your aging report can also reveal credit policy red flags. If one customer consistently pays late, it may be time to limit their credit. But if multiple customers fall behind, your credit terms might be too lenient.

Use your report to:

• Identify high-risk customers
• Compare your credit risk to industry benchmarks
• Tighten or revise your credit terms

Also, review your collections process. Frequent late payments (especially those over 60 or 90 days) may signal it’s time to make changes, like sending invoices faster, offering early payment discounts, or partnering with a collections agency.

Result: Stronger credit controls, faster payments, and a healthier bottom line.

Run your business with confidence

An accounts receivable aging report gives you a clear view of who owes you, how much, and for how long, so you can act fast to improve cash flow. Whether it’s sending a quick reminder or escalating to collections, you’ll know exactly where to focus.

With accounting software like QuickBooks, generating and customizing these reports is simple. Set up automated invoices, reminders, and customer settings—all in one place. That means fewer surprises, faster payments, and more control over your bottom line.