How do I read an accounts receivable aging report?
How to read your AR aging report — what each column means and what to do about it
Short answer
An AR aging report groups all your outstanding invoices into time buckets: Current (not yet due), 1–30 days past due, 31–60 days, 61–90 days, and 90+ days. The Current and 1–30 columns are normal — most of those invoices will pay on their own. The 31–60 column needs active follow-up: call or email every invoice in this bucket. The 61–90 column is a warning — recovery probability has dropped meaningfully, and a formal demand letter is warranted. The 90+ column represents your highest write-off risk; any invoice here should be escalated to a collections agency or small claims court if it has not already been disputed and resolved.
Every major accounting platform — QuickBooks Online, Xero, FreshBooks, Zoho Books — generates an AR aging report in the Reports section. The default view groups invoices by the number of days since the due date passed. Each row is a customer; each column is a time bucket. The total at the bottom of each column is your exposure in that aging category.
The Current column shows invoices that are not yet due. Some businesses include invoices due within the next 30 days here as a forward-looking view. Do not ignore this column — if a client has a pattern of paying only after multiple reminders, a proactive call before the due date can prevent the invoice from aging at all.
The 1–30 days column is your immediate action list. Every invoice in this bucket should receive a follow-up contact within the first week it appears. The customer has recently missed a due date — a brief, professional check-in ('just verifying the invoice is in your queue') converts a large fraction of these into same-week payments. The further an invoice moves into the 31–60 bucket without action, the harder collection becomes.
The 31–60 and 61–90 columns indicate invoices that have survived at least one missed payment cycle. By this point, a simple reminder email is rarely sufficient — a phone call or personal email is needed. For invoices above about $500, a formal written demand stating the outstanding balance and a specific pay-by date significantly increases response rates. Industry data shows that recovery probability drops by roughly 1–2 percentage points per day in this range.
The 90+ column is the most important to address immediately but the hardest to collect on. The CCAA reports that invoices in the 90+ day bucket have a recovery rate under 30% without escalation. The action here is not another reminder — it is a formal demand letter followed by either a collections referral or a small claims filing. Do not let invoices sit in this bucket for months. Every week of inaction reduces both recovery probability and legal options.