What is an aging report?

An aging report categorizes outstanding amounts by how long they have been due, typically showing current, 30-, 60-, and 90+ day categories. For professional service firms, aging reports for both receivables and payables guide collection priorities and payment decisions.

Key characteristics

• Categorizes amounts by age

• Shows current through 90+ days

• Available for AR and AP

• Guides collection priorities

• Identifies problem accounts

• Should be reviewed weekly

Why it matters for professional service firms

Aging reports reveal where attention is needed. Old receivables need collection focus; old payables need resolution. Professional service firms should review AR aging weekly to prioritize collections and AP aging to manage vendor relationships.

Real-world example

Michelle reviewed AR aging: $180,000 current, $62,000 at 30 days, $28,000 at 60 days, and $15,000 over 90 days. Focus immediately shifted to the $15,000 over 90 days, investigation: 2 disputed invoices ($8,000) and 3 collection issues ($7,000). Resolution within 30 days recovered $12,000 and identified $3,000 requiring write off. Weekly aging review became standard practice.