What is an aging schedule?

An aging schedule is a detailed report that categorizes accounts receivable by the length of time invoices have been outstanding, typically in 30-day increments (current, 1 to 30 days, 31 to 60 days, 61 to 90 days, and over 90 days). For professional service firms, aging schedules provide visibility into collection health, identify problem accounts requiring attention, and inform cash flow projections. Regular review of aging schedules enables proactive collection efforts before receivables become uncollectible.

Key characteristics

• Categorizes receivables by days outstanding in 30-day buckets

• Shows both dollar amounts and percentages in each category

• Identifies specific clients with overdue balances

• Should be reviewed weekly or at a minimum, monthly

• Triggers escalating collection actions by age category

• Informs bad debt reserve calculations and write-off decisions

Why it matters for professional service firms

Aging schedules transform a single AR number into actionable intelligence. Knowing you have $200K in receivables is less useful than knowing $50K is current, $80K is 30 to 60 days, and $70K is over 90 days. The distribution reveals collection health and urgency. Professional service firms reviewing aging schedules weekly catch problems early: a client slipping from current to 60 days warrants a call before they reach 90 days and become difficult to collect. Consistent aging reviews correlate strongly with lower bad debt and faster overall collections.

Real-world example

David's consulting firm reviewed AR only as a total number ($185K) without aging detail. Implementing weekly aging review revealed: current $62K (33%), 1 to 30 days $45K (24%), 31 to 60 days $38K (21%), 61 to 90 days $25K (14%), over 90 days $15K (8%). The 22% over 60 days was concerning. Further analysis identified three clients representing most of the aged balance. Direct partner outreach recovered $32K within two weeks. Ongoing weekly review with escalating actions (automated reminder at 30 days, personal call at 45 days, partner involvement at 60 days) reduced over 60-day balances to under 8% within six months.