Accounts Receivable Aging Report: How to Create and Read One

Quick answer: An accounts receivable aging report is a table of every unpaid customer invoice, grouped by how long each one has been outstanding: usually current, 1–30, 31–60, 61–90 and over 90 days past due. It shows at a glance who owes you money, how much, and which balances are at risk, so you can prioritize collections.

This guide shows how to build an aging report step by step, works through a full five-customer example with correct totals, explains how to estimate bad debts from it and lists what to do with each bucket. Clean aging starts with clean invoices, so make sure every invoice from our invoice generator has a unique number and a real calendar due date.

What an accounts receivable aging report shows

An aging report (or AR aging schedule) answers three questions:

• How much is owed in total? The grand total equals your accounts receivable balance.
• How overdue is it? The buckets show how much is current versus late, and how late.
• Who owes it? Rows by customer reveal which clients pay slowly.

It is one of the most practical reports in small business finance, and it underpins almost everything in our accounts receivable guide.

Accountants and lenders also use it. At year end it helps decide whether any balances should be written off, and a lender reviewing a credit application may ask for a recent aging report to judge how reliably your customers pay. Even a one-person business benefits, because a single glance replaces scrolling through sent emails to work out who still owes what.

Aging buckets explained

Bucket	Meaning	Typical risk
Current	Not yet due	Low
1–30 days	Up to a month past due	Low to moderate; often an oversight
31–60 days	One to two months past due	Moderate; needs active follow-up
61–90 days	Two to three months past due	High; escalate
Over 90 days	More than three months past due	Highest; consider collections or write-off

The buckets above assume aging from the due date. Some businesses age from the invoice date instead, in which case a Net 30 invoice moves into "31–60" as soon as it becomes overdue. Pick one approach, label it on the report and stick with it.

How to create an aging report in 5 steps

Step 1: List every unpaid invoice

Export or list each open invoice with customer, invoice number, invoice date, due date and outstanding balance. Include partially paid invoices at their remaining balance and subtract any unapplied credit notes.

Step 2: Choose a report date

Typically the last day of the month or today's date. All aging is measured against it.

Step 3: Calculate days past due

Days past due = report date − due date. For example, an invoice due on 15 September 2026 and aged as of 31 October 2026 is 15 days past due by the end of September plus 31 days in October = 46 days past due, which places it in the 31–60 bucket. A negative result means the invoice is current.

Step 4: Assign each balance to a bucket

In a spreadsheet, a nested IF formula can place each balance in the right column based on days past due.

Step 5: Total by customer and by bucket

Sum each row for customer totals and each column for bucket totals. The grand total must equal your accounts receivable balance; if it doesn't, an invoice or payment is missing.

Worked example: a five-customer aging report

Here is an aging report for a small business as of 31 October 2026, aged from the due date.

Customer	Current	1–30	31–60	61–90	Over 90	Total
Customer A	$4,200	$1,800	$0	$0	$0	$6,000
Customer B	$0	$2,500	$1,500	$0	$0	$4,000
Customer C	$3,000	$0	$0	$2,000	$0	$5,000
Customer D	$0	$0	$0	$0	$1,200	$1,200
Customer E	$2,800	$0	$1,000	$0	$0	$3,800
Total	$10,000	$4,300	$2,500	$2,000	$1,200	$20,000
% of total	50.0%	21.5%	12.5%	10.0%	6.0%	100%

Check the maths: the column totals $10,000 + $4,300 + $2,500 + $2,000 + $1,200 = $20,000, and the row totals $6,000 + $4,000 + $5,000 + $1,200 + $3,800 = $20,000. Both agree, so the report balances.

What this report tells you

• Half of receivables ($10,000) aren't due yet, which is healthy.
• Half are overdue ($10,000), and $3,200 (16%) is more than 60 days late.
• Customer C pays some invoices on time but has a $2,000 invoice over 60 days late, possibly a dispute worth investigating.
• Customer D's $1,200 is over 90 days late and should be escalated now.
• Customer B has slipped into the 31–60 bucket and needs a call, not just another email.

Estimating bad debts from the aging report

Businesses using accrual accounting often estimate an allowance for doubtful accounts by applying a percentage to each bucket. The percentages below are illustrative only; base yours on your own collection history.

Bucket	Balance	Estimated uncollectible	Allowance
Current	$10,000	1%	$100
1–30 days	$4,300	3%	$129
31–60 days	$2,500	10%	$250
61–90 days	$2,000	25%	$500
Over 90 days	$1,200	50%	$600
Total	$20,000	—	$1,579

On this estimate, the business expects to collect about $20,000 − $1,579 = $18,421 of its receivables. Discuss the method and any tax implications with your accountant.

What to do with each aging bucket

1. Current: Send a courtesy reminder a few days before the due date.
2. 1–30 days: Send polite follow-ups using our payment reminder emails, and check the invoice reached the right person.
3. 31–60 days: Phone the client, confirm there is no dispute, and send a statement of account listing all open invoices. Apply any late payment fees your contract allows.
4. 61–90 days: Escalate to a senior contact, consider pausing further work and follow our playbook for an overdue invoice.
5. Over 90 days: Send a final written notice, then decide between a payment plan, sending the invoice to collections, small claims or a write-off.

Tips for a more useful aging report

• Use consistent invoice numbers so every line traces back to a document. See our invoice numbering system guide.
• Apply payments the day they arrive, or the report will overstate what is overdue.
• Add a notes column for promised payment dates and disputes.
• Compare month to month. A growing 31–60 bucket is an early warning even if the total looks stable.
• Feed it into your forecast. Expected collections by bucket make a cash flow forecast far more realistic.

Building the buckets in a spreadsheet

If you don't have accounting software, a spreadsheet aging report takes about half an hour to set up. Use one row per open invoice with these columns: customer, invoice number, invoice date, due date, balance, days past due and bucket.

• Days past due: put the report date in a fixed cell (for example H1) and use =$H$1-D2, where D2 is the due date.
• Bucket: use a nested IF on the days-past-due cell, such as =IF(F2<=0,"Current",IF(F2<=30,"1-30",IF(F2<=60,"31-60",IF(F2<=90,"61-90","Over 90")))).
• Summary: a pivot table with customers as rows, buckets as columns and the sum of balance as values produces the report shown above.

Change the report date each time you run it and the whole report re-ages automatically. Keep a copy of each month's version so you can compare trends.

Common aging report mistakes

• Forgetting partial payments, which overstates the amount overdue.
• Leaving disputed invoices unmarked. A disputed balance needs resolution, not reminders; flag it separately.
• Mixing currencies without conversion. Convert foreign-currency balances at a consistent rate or report them separately.
• Using the invoice date for some customers and the due date for others. Consistency matters more than which method you choose.
• Running the report but not acting on it. Assign a next step and a date to every balance over 30 days.

If you are not using accounting software, an invoice tracker spreadsheet can produce the same aging buckets with a few formulas.

Keep your receivables current

The easiest aging report to manage is one where most balances sit in "current". Send clear, prompt invoices from the invoice generator (the Mono invoice template keeps the due date and amount front and center) and review your aging report every week.