An accounts receivable aging report lists unpaid customer invoices and unused credit memos by date ranges. Receivables are categorized by how long they have been outstanding and broken down into 30-day intervals (e.g., 0–30 days, 31–60 days, 61–90 days). This report helps businesses identify invoices that are overdue for payment and assess the financial health of their receivables.

According to a 2025 report on business-to-business (B2B) payment practices, only 52% of B2B invoices were paid on time, with 43% invoices becoming overdue and the remaining 5% written off as bad debt.

Below, we’ll cover what businesses should know about accounts receivable aging, including how it works, how to create reports, and the benefits it provides.

What’s in this article?

• What’s included in an accounts receivable aging report?
  
• How to create, analyze, and act on an aging report
  
• How to calculate accounts receivable aging
  
• Benefits of accounts receivable aging
  
• How Stripe Revenue Recognition can help
  

What’s included in an accounts receivable aging report?

An accounts receivable aging report typically includes the following:

• Customer information: The customer or company name, which can also include contact details or an account number for reference.

• Invoice details: The invoice number, date it was issued, and total amount due.

• Aging categories: Aging categories reflect how long an invoice has been outstanding. Common categories are 0–30 days, 31–60 days, 61–90 days, and over 90 days.

• Amounts due: The amount due in each aging category per customer and total amount due across all aging categories per customer. The report might also provide a grand total of all receivables due.

• Credit memos: Details of unused credit memos, which provide a credit on an invoice.

• Comments: Comments or notes section detailing specifics of collection efforts, payment agreements, or other relevant information.

How to create, analyze, and act on an aging report

Step 1: Create the report

Businesses can either prepare aging reports manually via spreadsheets, or automate these reports via accounting or billing software that pulls data directly from the accounts receivable ledger. This software might also be able to send automatic payment reminders to customers. Some businesses may also integrate their aging reports with customer relationship management (CRM) systems to combine financial data with customer interaction data.

Depending on a business’s needs, aging reports can be customized to include additional information such as payment terms, past collection efforts, or notes on communication with the customer.

Here are the basic steps of creating an accounts receivable aging report:

• Compile invoices
  
• Set time intervals for categorization (e.g., 0–30 days, 31–60 days)
  
• Categorize invoices by the length of time they have been unpaid
  
• Calculate customer balances for each category
  
• Calculate total balances for each category
  

Update these reports regularly (many businesses choose a monthly cadence). This reflects the current status of accounts receivable and creates valuable documentation in the event of financial audits.

Step 2: Analyze the report

Schedule consistent reviews of the aging report, typically on a weekly or monthly basis, to keep a close eye on receivables and identify any overdue accounts early.

Businesses use the report to assess the following concerns:

• Delinquent accounts: Identify which customers are late on their payments and how long their invoices have been overdue. Focus on accounts that are significantly past due—these are your problem accounts that need immediate attention.

• Credit policies: Evaluate the effectiveness of credit policies and practices, including clear terms for payments, penalties for late payments, and potential incentives for early payments. Frequent or large balances in the older categories might indicate policies that are overly lenient or not enforced effectively.

• Bad debt: Assess the risk of bad debts. The longer an invoice remains unpaid, the less likely it will be paid. In 2025, as many as 5% of B2B invoices were written off as bad debt, with companies noting liquidity issues and payment process delays as the top reasons B2B customers paid invoices late.

• Patterns or trends: Look for trends that may indicate broader issues such as frequent delays from specific customers, or issues with particular products or services leading to disputes and delayed payments. Note which aging periods are accumulating the most unpaid receivables.

Step 3: Act on the report

Use the insights gained from aging reports to refine credit policies, improve customer communication strategies, and enhance overall accounts receivable management processes. Based on the report, businesses might take the following actions:

• Prioritize collections efforts: Use the report to prioritize your collections activities. Focus on the oldest debts first, as they have a higher risk of turning into bad debt.

• Send payment reminders: Reach out to customers with overdue accounts. Address any issues that arise such as invoice disputes.

• Pursue legal action: For accounts that remain unpaid for an extended period despite your efforts to collect them, consider whether it’s worth pursuing legal action to recover the funds. This should be a last resort, as it can be costly and time-consuming.

• Negotiate payment plans: Businesses can negotiate payment plans with customers to gradually recover owed amounts.

• Adjust credit policies: If you notice a pattern of late payments from certain customers or industries, it may be time to review and possibly adjust your credit terms for those groups. Businesses can adjust credit terms to require quicker payments or move to prepayment or cash on delivery (COD) terms.

• Forecast cash flow: Adjust your financial forecasting based on how much money the report shows should be coming in.

• Write off bad debt: If the debt is deemed unrecoverable, the business may decide to write off the amount as a bad debt expense.

• Implement proactive measures: Consider taking proactive measures such as conducting credit checks on new customers, or requiring deposits or partial payments up front for large orders or services.

How to calculate accounts receivable aging

Follow these steps to calculate accounts receivable aging and create an aging report:

1. Gather invoice data
   Collect all outstanding invoices. Document the invoice date, customer name, and amount due.

2. Determine the aging periods
   Decide on the time frames you want to use for aging the receivables.

3. Categorize each invoice
   Calculate the number of days each invoice has been outstanding. Categorize it into the appropriate aging period.

4. Calculate customer totals
   Organize invoices by customer and aging period. Calculate the total amount owed by each customer for each aging period.

5. Create the report
   Prepare a table or spreadsheet that lists each customer along the vertical axis and the aging categories along the horizontal axis. Fill in the table with the summed amounts for each customer and category. Add a total at the bottom of each column to see the total amount of receivables in each aging category.

Accounts receivable aging reports are also foundational for calculating Days Sales Outstanding (DSO), a key metric for many businesses that measures the amount of time it takes to collect a payment after a sale. In accounting, DSO is one metric used to assess cash flow and financial health.

Example: Calculating aging for three invoices

For this sample calculation, imagine a company with three outstanding invoices:

• Invoice A: $1,000, issued 20 days ago

• Invoice B: $2,000, issued 40 days ago

• Invoice C: $3,000, issued 75 days ago

The aging calculation would place Invoice A in the 0–30 days category, Invoice B in the 31–60 days category, and Invoice C in the 61–90 days category. The report would reflect these categorizations and sum the amounts for each category for a total of $1,000 owed in 0–30, $2,000 owed in 31–60, and $3,000 owed in 61–90.

Benefits of accounts receivable aging

• Improved cash flow management: By staying on top of overdue invoices, businesses can ensure they have the necessary funds for operations and investments.

• Reduced bad debt: By identifying and acting on overdue accounts promptly, businesses can reduce the likelihood of accounts becoming uncollectible.

• Customer credit checks: The aging report allows businesses to assess the credit of their customers and adjust their credit terms accordingly.

• More efficient collections process: Accounts receivable aging reports allow businesses to implement strategic collections processes that prioritize the most overdue accounts.

• Informed financial planning: The aging report provides a clear picture of expected cash inflows from receivables, informing financial planning.

• Regulatory compliance and reporting: Accounts receivable aging reports help businesses demonstrate compliance and meet reporting requirements.

• Better relationship management: Businesses can use accounts receivable aging reports to identify customers who may be facing financial difficulties and communicate with them to find solutions that are mutually beneficial—contributing to a positive customer relationship.

How Stripe Revenue Recognition can help

Revenue Recognition helps to streamline revenue accounting and financial reporting— accelerating end-of-month close, reporting, and more—so you can close your books with greater efficiency and accuracy. It automates and configures revenue accounting to help support compliance in line with ASC 606 and IFRS 15 standards.

Revenue Recognition can help you:

• Gain a more complete view of your revenue: In the Stripe Dashboard, automatically recognize revenue for all Stripe subscription and payments and import non-Stripe data for a complete revenue sub-ledger.

• Automate revenue reports: Generate accounting reports that are ready for ERP upload —without engineering resources.

• Customize for your business: Create and automate custom rules to recognize revenue, in line with your business’s accounting practices.

• Reconcile and close faster: Reconcile revenue faster and more accurately by tracing any journal entry amount down to the underlying customers and transactions.

Learn more about how Revenue Recognition can help you comply with global accounting principles, or get started today.