AR aging (also called accounts receivable aging or an aging schedule) is a report that groups your unpaid invoices into buckets based on how many days past due they are. The standard buckets are 0-30, 31-60, 61-90, and 90+ days overdue, with totals per bucket and per customer.

What it means in practice

The mechanics are simple. For each unpaid invoice on your books:

  1. Calculate days_overdue = today - due_date (zero if the invoice isn’t past due yet)
  2. Assign the invoice to a bucket based on that number
  3. Sum totals per bucket and per customer

The output looks like this:

Customer       | Current | 1-30  | 31-60 | 61-90 | 90+   | Total
---------------|---------|-------|-------|-------|-------|--------
Acme Corp      |  $2,400 |       |       |       |       | $2,400
Beta Industries|         |$1,890 |       |       |       | $1,890
Gamma LLC      |         |       |   $612|       |       |   $612
Delta Inc      |         |       |       |$3,400 |       | $3,400
Epsilon Ltd    |         |       |       |       |$2,150 | $2,150
---------------|---------|-------|-------|-------|-------|--------
Total          |  $2,400 |$1,890 |   $612|$3,400 |$2,150 |$10,452

The bucketing is not arbitrary. Each bucket corresponds to a different statistical recovery rate and a different collection strategy:

The 90-day cliff is the most important threshold — that’s where the recovery probability drops below half, and where most B2B businesses stop trying to recover internally.

Why it matters for invoice reconciliation

AR aging is downstream of accurate reconciliation. If your unpaid invoice list is wrong — invoices marked unpaid that were actually paid weeks ago — your aging report tells you to chase clients who already paid you. This is the most common bookkeeping error in small business, and it damages relationships in a way that’s hard to undo.

Before you run an aging report, your unpaid list must reflect reality. The two-step fix:

  1. Reconcile against the bank statement (checkunpaidinvoices.com automates this in 30 seconds)
  2. Mark every “Paid” and “Likely paid” match in your invoicing tool so the next aging report is clean

Once the list is honest, the aging report tells you exactly which clients need a reminder, which need a phone call, and which are bad-debt territory.

Aging buckets in different industries

The 30-day buckets are a default, not a universal standard. Some industries use different splits:

Match the buckets to your client base’s typical payment pattern. If 80% of your invoices pay within 45 days, a 0-15 / 16-30 / 31-45 / 46+ scheme might give you more actionable resolution.

AR aging vs. DSO

These two metrics measure related but different things:

AR aging tells you which clients to chase today. DSO tells you whether your collection process is getting faster or slower over time. Both belong in any cash-flow dashboard.

Generate an aging snapshot from raw CSVs with the bank reconciliation tool — unpaid / partial / paid in 30 seconds, no signup.

Quick FAQ

Why use buckets instead of just the per-invoice days-overdue? Aggregation. Aging buckets compress a list of 200 invoices into 5 numbers that fit in a single sentence: “We have $42k in AR, of which $8k is 60+ days overdue.” That’s the version that goes into a board meeting or a tax return.

Should I show clients their own aging report? No. The aging report is internal — it includes other clients and your private cash position. To the client, send a remittance advice or statement of account with just their open invoices.

What’s a healthy aging profile? Industry-dependent, but a rough rule: 70%+ of AR should be current or 0-30 days, less than 5% should be 90+. If 30%+ of AR is over 60 days, you have a collections problem.

Should aging buckets count from invoice date or due date? Always due date. Counting from invoice date conflates “client has had time to pay” with “client is late,” which mixes two different signals and dilutes the action signal.