Glossary
What is an aged trial balance and how do you use it?
An aged trial balance is a report listing all outstanding customer invoices grouped by how long they have been unpaid — current, 1–30 days, 31–60 days, 61–90 days, and 90+ days past due.
The aged trial balance (ATB) is the core working document for any AR operation. It tells you, at a glance, not just how much is owed but how long it has been owed — which is the variable that predicts collectability. An invoice at 15 days is almost certainly collectable. An invoice at 120 days has a significantly lower recovery probability, and the ATB helps you prioritize which balances deserve the most attention now.
Most accounting software (QuickBooks, Xero, FreshBooks) generates an ATB on demand. The report typically shows: customer name, invoice number, invoice date, due date, and the balance distributed across aging buckets. Some systems also show the total outstanding balance per customer across all their invoices.
AR teams use the ATB to run their weekly collections workflow: everything in the 31–60 bucket gets a call; everything in the 61–90 bucket gets a formal follow-up; anything in the 90+ bucket gets escalated. The ATB is also the input for the allowance for doubtful accounts calculation — different buckets carry different expected loss rates.
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