Back to Blog
Late payments can be a serious cash flow killer for businesses and for growing businesses, those delays can create a chain reaction, hurting your ability to pay vendors, cover payroll, or invest back into growth.
So, how can you keep track of your receivables? How do you know how long they have been overdue? and who’s falling behind on them? It’s a simple answer: Accounts Receivable (AR) aging report.
Let’s understand what it is.
What is an AR aging report?
The AR aging report emerges as an important tool in your finance toolkit. It gives you a clear picture of your overdue invoices, broken down by how long each one has been outstanding. Whether it’s 0-30 days (you’re likely in good shape) , 31-60, or creeping into the danger zone of 90+ days, this report helps you spot trouble early.
It helps you quickly spot slow payers, overdue accounts, and patterns that may affect your cash flow.
Aging reports also make collections easier by showing which accounts need the most urgent follow-up. For growing businesses, it’s one of the simplest ways to stay ahead of payment issues and keep the cash moving.
The main part of the report is the aging schedule. This is where invoices are grouped into date ranges, like current (not yet due), 1-30 days overdue, 31-60 days, and so on. This layout helps you quickly see which accounts are falling behind and by how much.
Some reports also include invoice numbers, due dates, and even contact info for each customer, making it easier for your finance or collections team to follow up.
In short, the report answers three big questions:
- Who owes you money?
- How much do they owe?
- How late are they?
It becomes very helpful when you want to figure out which payments to chase first, or spot a pattern before it becomes a cash flow issue.
Why is an AR report so important?
An AR aging report is one of the simplest ways to protect your cash flow and get paid faster.
Here’s why it matters:
- It spots late payers early
If a customer consistently lands in the 60+ or 90+ day columns, that’s a clear sign their payment habits are slipping. The report helps you catch that pattern before it becomes a bigger issue. - It gives your collections team a priority list
Instead of randomly chasing payments, your team knows exactly which accounts to follow up on first, starting with the oldest and biggest. - It highlights rising cash flow risk
A report full of older receivables means your incoming cash is getting delayed. That can affect your ability to pay vendors, employees, or even cover daily operations. - It helps you manage credit exposure
You can use the data to adjust credit limits for risky accounts or put new terms in place to avoid future delays. - It supports better planning
For CFOs and finance leads, the aging report is a key tool for forecasting liquidity, identifying bad debt risk, and adjusting cash flow strategies. According to Upflow, using AR aging data as part of your receivables strategy can directly reduce DSO and improve how quickly cash moves through your business.
In short, this one report can help you tighten collections, avoid surprises, and keep your financial engine running smoothly.
How to read an AR aging report?
Reading an AR aging report isn’t rocket science, but knowing what to look for can help you catch issues before they hit your cash flow.
At first, the report will show you a list of customers and their outstanding invoice amounts. These are sorted into age brackets like current (not yet due), 1-30 days overdue, 31-60, 61-90, and 90+ days.
Here’s what a healthy AR aging report looks like:
- Most invoices fall in the “current” or 0-30 days buckets
- Very few, if any, are sitting in the 60+ day range
- The total outstanding amount is in line with your usual receivables flow
If your report looks like that, great, your collections process is probably working well.
But it’s important to watch out for consistently late-paying customers. If the same names show up in the overdue columns every month, it might be time to rethink their credit terms. You also need to keep an eye on increasing total overdue balance month-over-month. This is a sign your cash is getting stuck, and you may need to step up your collections process.
Want to go one step further? Look at trends over time. Compare your aging reports month-to-month to see if overdue invoices are growing or shrinking. Spotting these patterns early helps you fix problems before they pile up.
AR aging report vs. accounts payable aging report
An AR aging report shows what your customers owe you, essentially, money that’s supposed to be coming in. It breaks down unpaid invoices by how long they’ve been outstanding, so you can quickly spot overdue accounts and follow up.
On the other hand side, an accounts payable aging report tracks what you owe to your vendors. It organizes your outstanding bills by due date, and helps you manage outgoing payments without missing deadlines or damaging supplier relationships.
Think of AR as cash inflow and AP as cash outflow. Both sit on opposite sides of the balance sheet, but together, they give you a complete picture of your business’s financial health.
Staying on top of both ensures you’re not just collecting what’s owed, but also paying what’s due, strategically and on time. That’s how you keep your cash flow steady and your operations smooth.
How Forwardly turns aging reports into faster payments
Spotting overdue invoices in an aging report is only half the battle, the real challenge is getting paid. That’s where Forwardly steps in.
- Get paid instantly: Collect overdue invoices in as little as 60 seconds with instant payments, even on weekends.
- Sync with your accounting tools: Invoices and payment statuses update automatically in QuickBooks Online, Xero, ZohoBooks, and FreshBooks.
- Prioritize collections: Dashboards make it easy to see who owes what, so you can chase the biggest risks first.
Instead of just spotting late payments, Forwardly helps you clear them, turning your AR aging report into predictable cash flow. An AR aging report shows you where cash is stuck but Forwardly helps you unlock it.
Take control of your receivables today. Sign up to Forwardly to turn overdue invoices into predictable cash flow.
