Financial Metrics
Accounts Receivable Aging: What It Is, How to Structure the Report, and How to Use It
October 24, 2025•By Paraglide Team
Accounts receivable (AR) aging is one of the most practical tools for monitoring customer payment behavior and managing working capital. While metrics like DSO and AR turnover give a high-level view, an aging report breaks receivables down by how long they've been outstanding — making it a frontline tool for credit controllers and CFOs.
In this article we'll cover:
AR aging is the practice of categorizing outstanding invoices by the length of time they've been unpaid. The resulting report, called an AR aging report, shows receivables grouped into time "buckets," such as 0–30 days, 31–60 days, 61–90 days, and over 90 days.
The goal is simple: to identify overdue accounts quickly, track patterns of late payment, and prioritize collection efforts.
A standard AR aging report includes:
Example layout:
| Customer | 0–30 Days | 31–60 Days | 61–90 Days | 91+ Days | Total |
|---|---|---|---|---|---|
| ABC Ltd. | $25,000 | $10,000 | $5,000 | – | $40,000 |
| XYZ Inc. | $15,000 | $8,000 | – | $3,000 | $26,000 |
| Total | $40,000 | $18,000 | $5,000 | $3,000 | $66,000 |
While a traditional AR aging report shows the current state, it doesn't reveal how invoices progress through time buckets. That's where dunning cohorts come in.
A dunning cohort table tracks groups of invoices by their start date (when the invoice was issued or became due) and shows how they "age" across different dates. This allows finance teams to see how quickly invoices are being resolved or slipping into later buckets.
Example: Dunning Cohort Table
| Invoice Start (Due Date) | At Due Date | +30 Days | +60 Days | +90 Days | +120 Days | Status |
|---|---|---|---|---|---|---|
| Jan 1, 2025 | $100,000 | $40,000 | $20,000 | $10,000 | $5,000 | $25,000 still open |
| Feb 1, 2025 | $80,000 | $30,000 | $15,000 | $8,000 | $2,000 | $25,000 still open |
| Mar 1, 2025 | $120,000 | $60,000 | $25,000 | $12,000 | $5,000 | $18,000 still open |
This structure shows how much of each cohort is collected over time versus how much drifts into later buckets.
Why it's valuable:
The report shows which accounts are overdue and by how much, helping AR teams focus on the riskiest invoices first.
Aging reports reveal patterns, such as customers who consistently pay late or who are slipping into longer buckets. This can inform credit policy adjustments.
Invoices in the 91+ day bucket are often at high risk of becoming uncollectible. Aging helps finance teams estimate allowances for doubtful accounts.
By analyzing the timing of expected collections, AR aging provides more accurate cash flow forecasts.
Consistently late-paying customers may need tighter terms, upfront deposits, or reconsideration of credit risk.
CFOs, auditors, and investors often review AR aging as part of financial reporting and risk assessments.
Accounts receivable aging is a foundational tool in working capital management. By structuring invoices into clear time buckets, AR teams gain visibility into payment risk, collections priorities, and cash flow impacts.
When combined with metrics like DSO and AR turnover, AR aging helps finance teams act decisively: reducing late payments, improving liquidity, and protecting against bad debt.
Want to see how AI-powered AR automation can streamline aging reports and collections? Book a demo with our team.
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