What is accounts payable aging?

Accounts payable aging categorizes amounts owed to vendors by how long invoices have been outstanding, typically in current, 30-, 60-, and 90+-day buckets. For professional service firms, AP aging reveals payment patterns, identifies past due amounts requiring attention, and supports cash flow planning.

Key characteristics

• Categorizes payables by age

• Shows current through 90 plus days

• Reveals payment patterns

• Identifies past due amounts

• Supports cash flow planning

• Should be reviewed weekly

Why it matters for professional service firms

AP aging shows what you owe and when. Aged payables can damage vendor relationships, incur late fees, and affect credit. Professional service firms should regularly review AP aging, ensuring payments are made within terms and investigating aged items. Managed AP supports good vendor relationships and a firm reputation.

Real-world example

Lisa's firm paid bills inconsistently without an aging review. AP aging analysis revealed: $52K current, $28K at 30 days, $18K at 60 days, and $12K over 90 days. The $12K over 90 included a disputed invoice ($5K requiring resolution) and overlooked invoices ($7K paid immediately with apologies). Two vendors had placed the firm on credit hold. Implementing weekly AP aging review: prioritize payments by age and relationship importance, resolve disputes promptly, and maintain current status. Vendor relationships restored and payment process disciplined.