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Providing Creative Solutions to Common Problems
Providing Creative Solutions to Common Problems
An accounts receivable aging report is a financial document that organizes your unpaid customer invoices by the length of time they’ve been outstanding. Think of it as a diagnostic tool that reveals the health of your cash flow at a glance.
The report breaks down your receivables into time-based categories, typically current (0–30 days), 31–60 days, 61–90 days, and over 90 days past due. This segmentation immediately shows you which accounts need attention and which customers consistently pay late.
For B2B businesses, this report serves multiple purposes. It helps you forecast cash flow, identify customers who may need credit limit adjustments, calculate bad debt reserves for financial statements, and determine which accounts have aged beyond your internal collection capabilities.
The reality is straightforward: the longer an invoice remains unpaid, the less likely you are to collect it. Internal recovery rates drop significantly after 90 days, which is precisely when professional collection services become most valuable.
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Your accounts receivable aging report directly impacts your business operations in several critical ways. Days Sales Outstanding (DSO), which is a key liquidity metric, increases when aging buckets swell with overdue invoices. High DSO means cash is tied up in receivables rather than funding operations, payroll, or growth initiatives.
The report also reveals patterns that internal collection efforts alone cannot solve. When you see the same customers repeatedly appearing in 60+ day buckets, or when your 90+ day category grows month over month, these are clear signals that your current collection approach needs reinforcement.
For commercial businesses managing multiple customer accounts, the aging report serves as a triage tool. Recent delinquencies (30–60 days) often respond to friendly payment reminders from your accounts receivable team. But accounts that have crossed the 90-day threshold typically require the specialized expertise, legal resources, and persistence that professional collection agencies provide.
Creating an effective accounts receivable aging report is simpler than most business owners expect. Start by exporting your open invoice data from your accounting software.
Your export should include essential columns: Customer Name, Invoice Number, Invoice Date, Due Date, Original Amount, Payments Applied, and Current Balance Due. Import this data into Excel or Google Sheets if you’re building a manual report.
Calculate the “Days Overdue” for each invoice using a simple formula: =TODAY() – Due Date. This formula automatically updates each time you open the spreadsheet, keeping your aging calculations current.
Next, create your aging bucket columns using nested IF formulas:
Use SUM functions at the bottom of each column to calculate bucket totals and your overall accounts receivable balance. Add conditional formatting to highlight accounts in the 90+ day column in red—these require immediate attention.
For enhanced functionality, create a pivot table that summarizes aging by customer. This view quickly identifies which specific customers carry the highest overdue balances and should be prioritized for collection efforts or referred to professional recovery services.
Below are examples of templates and guides you can download and customize for your business.
Washington State Auditor’s Office (SAO): The Washington State Auditor’s Office provides comprehensive guidance for local governments on managing accounts receivable aging reports. Their resources include an Accounts Receivable Guide covering policies and best practices for billing and collections, an Internal Control Checklist for AR in Excel format for self-assessing.
University System of Georgia (USG): The University System of Georgia offers a detailed AR Aging Reconciliation and Analysis framework used by state institutions to reconcile Banner subsidiary ledger data to PeopleSoft general ledger balances.
U.S. Treasury – Treasury Report on Receivables (TROR): The U.S. Treasury publishes the Treasury Report on Receivables and Debt Collection Activities (TROR) as the federal government’s primary means for collecting data on non-tax receivables owed to the United States.
Corporate Finance Institute – AR Aging Template: The Corporate Finance Institute offers a free AR Aging Excel Template that helps categorize accounts receivable by how long invoices have been outstanding, typically in 30-day intervals. This template includes functionality to calculate your allowance for doubtful accounts using assumptions for each time interval, enabling companies to assess client risk, evaluate payment patterns, and represent unpaid outstanding debts accurately in financial statements.
Your AR aging report provides clear indicators about when to transition from internal collection efforts to professional recovery services. Accounts that are 60–90 days past due and have no payment commitments, despite your follow-up attempts, have entered the zone where specialized collection expertise delivers significantly better results.
Balance size matters too. For commercial accounts under $500, contingency fees may not justify the cost of professional collection. But for invoices of $1,000 or more, which represent meaningful revenue for most B2B operations, the contingency model makes perfect financial sense. You pay nothing up front and only pay a percentage (typically 10–25%) when the agency successfully recovers your money.
When your accounts receivable aging report reveals balances stuck in the 60–90 day or 90+ day categories, we offer specialized commercial collection expertise that turns stagnant receivables into recovered revenue.
With over 20 years focused exclusively on B2B accounts, at Southwest Recovery Services, we understand the payment cycles, relationship dynamics, and communication approaches that work for commercial debtors. Our contingency-only pricing model eliminates your financial risk, as you pay nothing unless we successfully collect your money.
Our approach combines veteran collectors, multi-channel outreach (phone, email, text, mail), and AI-powered tracking software that monitors every promise-to-pay. Our founder’s daily involvement ensures quality control across every account, with compliance-first practices that protect your business reputation.
For businesses in trucking and logistics, construction, oil and gas, and property management, we bring industry-specific expertise to accounts that internal teams cannot resolve. Our 12 offices across seven states provide nationwide reach.
Frequently Asked Questions (FAQs)
Most commercial businesses should generate AR aging reports weekly or monthly, depending on invoice volume and cash flow needs. Weekly reviews help you catch problems early and maintain consistent follow-up on aging accounts. Monthly reports work for smaller operations with fewer invoices.
Healthy commercial businesses typically maintain 70–80% of receivables in the current (0–30 day) bucket, 10–15% in the 31–60 day range, and less than 10% combined in the 61–90 and 90+ day categories. If your 90+ day bucket exceeds 15% of total receivables, you’re facing significant collection challenges that warrant immediate attention. Any account that has aged past 90 days deserves professional collection intervention.
To calculate bad debt reserves from your aging report, assign increasing uncollectible percentages to each aging bucket based on historical experience—for example: 1% for current, 4% for 1–30 days, 10% for 31–60 days, 30% for 61–90 days, and 50% for over 90 days. Multiply each bucket total by its percentage, then sum the results for your total estimated bad debt allowance. Adjust these percentages over time based on your actual collection performance.
Yes, you can build a functional AR aging report using Excel or Google Sheets with your invoice data. While this manual approach works, most modern accounting platforms (QuickBooks, Xero, FreshBooks) generate aging reports automatically with just a few clicks.
At Southwest Recovery Services, we specialize in recovering commercial B2B accounts that have exhausted internal collection efforts, typically those 60–90+ days past due. Operating exclusively on contingency-based pricing, we bring 20+ years of experience in trucking, logistics, construction, oil and gas, and property management sectors. With 12 offices across seven states, we provide nationwide reach while maintaining the relationship-focused approach that commercial businesses require.
Note: Recovery rates mentioned are for general reference only and not guaranteed. Actual results vary by account and industry. Contact Southwest Recovery Services for a customized quote.
We make it fast and easy to refer past due and delinquent accounts to our professional recovery agents. You decide the range on what you will accept on each case, and you ONLY pay a percentage of what we actually collect to resolve the case. Ready to get started, or want to learn more? Fill out this form and a dedicate account manager will call you to get started.
