# How to read an aged receivables report

An aged receivables report lists what customers owe you by how overdue each invoice is. Read the total, then the oldest column, then the biggest customers. Match the total to accounts receivable on the balance sheet.

Free tool: [AR aging report generator](https://www.pulsify.tech/free-tools/ar-aging-report-generator/). Enter your invoices and due dates to sort them into current, 1 to 30, 31 to 60, 61 to 90 and over 90 days.

## Why it matters

The report shows who owes you and for how long. The older a debt is, the less likely you are to collect it.

It also tells you where to start your day. Work from the oldest and largest amounts down.

## The steps

1. **Set the report date.** Use the month-end date so the total matches the balance sheet.
2. **Age by due date.** An invoice is current until its due date. Then it moves into the 1 to 30 column and so on.
3. **Check the total.** The total must equal Accounts Receivable on the balance sheet. If not, look for unapplied payments, credit notes and manual journals.
4. **Look at the oldest column.** List every invoice over 60 days. For each, note the reason: dispute, cash trouble or missed.
5. **Look at the biggest customers.** A single customer with a large balance in the older columns is a risk to your cash.
6. **Find unapplied credits.** Payments and credit notes not matched to an invoice make a customer look worse than they are. Apply them.
7. **Set actions.** Make a list of customers to call, letters to send and accounts to put on hold.

## Worked example

Example Plumbing Supplies Pty Ltd runs its receivables report at 31 October.

| Customer | Current | 1-30 | 31-60 | 61-90 | Over 90 | Total |
| --- | --- | --- | --- | --- | --- | --- |
| Example Builders | A$8,800 | A$0 | A$0 | A$0 | A$0 | A$8,800 |
| Example Developments | A$0 | A$0 | A$6,600 | A$0 | A$0 | A$6,600 |
| Example Renovations | A$2,200 | A$3,300 | A$0 | A$0 | A$1,100 | A$6,600 |
| Total | A$11,000 | A$3,300 | A$6,600 | A$0 | A$1,100 | A$22,000 |

The total of A$22,000 agrees with the balance sheet. Example Developments owes A$6,600 in the 31 to 60 column, so it gets a call. The A$1,100 over 90 days is a candidate for a bad debt review.

## Common mistakes

- Ageing by invoice date.
- Leaving unapplied payments on the report.
- Only looking at the total.
- Never reviewing the over 90 column.

## Common questions

### What is a healthy receivables report?

Most of the balance sits in current and 1 to 30. A large 60 plus column is a warning.

### How often should I run it?

Weekly if you chase debts weekly, and always at month end.

### What is the link to DSO?

DSO turns the receivables balance into days of sales. See how to work out days sales outstanding.

## Next step

Use the [AR aging report generator](https://www.pulsify.tech/free-tools/ar-aging-report-generator/) first. Then see [how accounts payable and receivable work together](https://www.pulsify.tech/blog/accounts-payable-and-accounts-receivable-australia/).

Source: https://www.pulsify.tech/how-to/read-an-aged-receivables-report/ (last checked 2026-10-20)