AR metrics · Article
How to read an AR ageing report in 15 minutes
The ageing report is the most-used and least-read document in finance. Here is the 15-minute routine I use to turn it into the five actions that matter this week.
What an ageing report shows
An accounts receivable ageing report lists what each customer owes, split into buckets by how long the amount has been outstanding, usually not due, 1–30, 31–60, 61–90, 91–180 and 180+ days past due. Some reports age from the invoice date instead of the due date; check which one yours uses before drawing conclusions.
The 15-minute routine
Minutes 1–3: the shape
Look at the total by bucket as a percentage. A healthy book has most of its value in "not due" and 1–30. If 90+ is growing month on month, that is your headline, whatever the DSO says.
Minutes 4–6: concentration
Sort customers by total balance. What share do the top 10 hold? If it is more than half, your collections plan is really ten account plans. Give each of them a named owner.
Minutes 7–10: red flags
- Customers with balances in three or more buckets: a payment pattern problem, not a one-off.
- Old small items under large current balances: usually disputes or short payments nobody has closed.
- Credit balances: unapplied cash or credit notes that should be matched or refunded.
- Customers still buying while 90+ days overdue: a credit control gap.
Minutes 11–15: the action list
Write down five actions for the week: the three largest overdue balances to call, the oldest dispute to escalate, and one credit hold or limit to review. That list is worth more than the whole report.
Measures to add alongside the ageing
- DSO and average days delinquent: try the DSO calculator.
- Overdue % and 90+ % of total receivables, tracked monthly.
- Top 10 concentration and how it changes.
Let the tool do the first pass
Upload your ageing in Excel or CSV to the ageing strategy tool. Your browser reads the file and replaces customer names with codes before anything is sent. You get priorities by customer, a 30-60-90 day plan, and email and call scripts, with the real names filled back in on your screen. For the bigger picture, read how to reduce DSO.
Frequently asked questions
What is an accounts receivable ageing report?
A report listing what each customer owes, split into time buckets such as not due, 1–30, 31–60, 61–90 and 90+ days past due, used to prioritise collections and assess credit risk.
Should ageing be based on invoice date or due date?
Due date is better for collections, because it shows what is actually late. Invoice-date ageing is common in some ERPs; know which one your report uses.