Aged balance

The aging report is a table that categorizes unpaid customer invoices by age: not yet due, 0 to 30 days past due, 31 to 60 days past due, 61 to 90 days past due, and more than 90 days past due.

Example

An aging balance sheet shows €80,000 in current receivables, €25,000 that are less than 30 days past due, and €9,000 that are more than 90 days past due. That €9,000 is the most urgent: the older an invoice gets, the less likely it is to be paid.

Why It’s Important

It’s the essential tool for determining who to follow up with first and for tracking the quality of accounts receivable over time.

To learn more: Read and analyze the aging account schedule. Free template: Excel kit for aging account schedule and DSO.

See also: dynamic balance, past-due receivables, DSO.