AR ageing

Splitting open customer balances into time buckets (current, 1–30, 31–60, …) based on due date or invoice date so collections know what is late.

Also searched as: accounts receivable aging, debtors ageing, aged receivables, AR aging report

A total AR figure hides whether money is merely outstanding or already dangerous. Ageing buckets turn the subledger into a collections plan: call the 60+ first, keep an eye on 31–60, and treat current as normal terms.

Buckets follow due date when you care about lateness, or invoice date when terms are messy. Credit memos and unapplied cash must net correctly or ageing lies.

If you have five customers who always pay on time, a formal ageing report is optional. The moment open items span months or currencies, ageing is the weekly control.

Three open invoices into buckets

As of 31 Mar: Inv A $1,000 due 15 Apr (current). Inv B $500 due 28 Feb (31–60 past due). Inv C $200 due 20 Jan (61–90 past due).

  1. Current = $1,000.
  2. 31–60 = $500.
  3. 61–90 = $200.
  4. Total open AR = $1,000 + $500 + $200 = $1,700.

Collections prioritises the $700 past due before chasing the $1,000 still inside terms.

Related modules

Related terms

FAQ

Should ageing use invoice date or due date?

Due date answers “are they late?” Invoice date answers “how old is the bill?” Most collections ageing is due-date based.