How to read an accounts receivable aging report
An aging report is the single most useful view of the money your trade buyers owe you. Here is how to read one and act on it.
The buckets
Every unpaid invoice goes into a column by how many days it is past its due date: current (not yet due), 1-30, 31-60, 61-90 and over 90 days. Each buyer is a row, and the bottom row totals each column.
In this example, most of the late money sits with one buyer, and one small account has an invoice more than 90 days late.
| Buyer | Current | 1-30 | 31-60 | 61-90 | 90+ |
|---|---|---|---|---|---|
| Harbour and Pine | $9,260 | $8,420 | $9,960 | $12,480 | |
| Northgate Deli Co | $3,150 | ||||
| Lune Street Salons | $1,880 | $2,240 | |||
| Copper Kettle Cafes | $4,610 | ||||
| Total | $14,290 | $10,660 | $9,960 | $12,480 | $4,610 |
What each bucket tells you
| Bucket | What it usually means | What to do |
|---|---|---|
| Current | Normal trade credit | Nothing, beyond a reminder before the due date |
| 1-30 | Forgotten or slow payment | Reminders by email and text, collect from saved card |
| 31-60 | A real problem is forming | Hold new orders, phone the buyer |
| 61-90 | Serious risk | Final notice, agree a payment plan, add statutory interest where it applies |
| 90+ | Likely bad debt | Formal recovery; consider whether to keep trading |
Two numbers to watch
Share of the book that is late. Add up everything past due and divide by the total owed. If it grows month on month, your collection process is not keeping up.
Concentration. If one buyer makes up most of the late columns, your risk sits with them. Lower their limit or put them on hold before the balance grows.
Terms Due builds this report live from your Shopify orders. See aging report.
Questions
How often should I run an aging report?
Weekly is ideal for a wholesale business. Terms Due can email it to you every Monday.
Is an aging report the same as a statement?
No. A statement is what you send one buyer. An aging report covers every buyer and is for you.
Related
Aging report
A live accounts receivable aging report for Shopify B2B: every open invoice in current, 1-30, 31-60, 61-90 and 90+ day buckets, by buyer, with CSV export.
Read moreChasing unpaid invoices
A practical process for chasing unpaid B2B invoices: timing, tone, channels, when to stop supplying, and reminder wording you can copy.
Read moreSetting credit limits
How to decide credit limits and payment terms for wholesale buyers: order value, trade references, credit checks, starting limits and when to review.
Read moreStop chasing wholesale invoices by hand
Install Terms Due, set a credit limit for each buyer and let the app hold, remind and collect.
Install on Shopify