Receivables Aging Calculator
Analyze your accounts receivable by age bucket. Enter the outstanding amount in each aging period to see total receivables, the current percentage, the amount aged over 60 days, and a collection risk assessment. Aging analysis is essential for managing cash flow and identifying collection problems.
Aging Breakdown
| Bucket | Amount | % of Total | Typical Write-off % |
|---|
What Is Receivables Aging?
Receivables aging (or AR aging) is a report that categorizes a company's accounts receivable by how long they have been outstanding. Standard buckets are 0–30, 31–60, 61–90, and 90+ days. The report shows which customers owe money and how long they have owed it.
Aging analysis is critical because the older a receivable is, the less likely it is to be collected. A $10,000 invoice aged 95 days is worth far less than a $10,000 invoice aged 15 days — even though they look identical on the balance sheet. Aging tells you the real quality of your receivables.
Aging Analysis Formulas
Total AR = Current + 31–60 + 61–90 + 90+
Weighted Avg Days = (0–30 × 15) + (31–60 × 45) + (61–90 × 75) + (90+ × 120), all divided by Total
Estimated Uncollectible = (61–90 × 10%) + (90+ × 50%)
The write-off percentages are industry-typical estimates. The 61–90 day bucket typically has 5–15% write-off; the 90+ day bucket typically has 30–60% write-off. Actual write-off rates depend on the industry and customer base.
Worked Example
A business has receivables of $20,000 current, $15,000 (31–60), $8,000 (61–90), and $5,000 (90+):
Total AR = $20,000 + $15,000 + $8,000 + $5,000 = $48,000
Current % = $20,000 ÷ $48,000 = 41.67%
Aged >60 days = $8,000 + $5,000 = $13,000 (27.08% of total)
Weighted avg days = ($20K × 15 + $15K × 45 + $8K × 75 + $5K × 120) ÷ $48K = 45.3 days
Estimated uncollectible = $8,000 × 10% + $5,000 × 50% = $3,300
Realistic AR value = $48,000 − $3,300 = $44,700
Interpretation: 27% of receivables are aged over 60 days — a moderate collection problem. The business should tighten collection efforts and consider whether the 90+ day accounts are worth pursuing.
How to Interpret Aging Analysis
- Current % above 70% — excellent collection. Most receivables are recent.
- Current % 50–70% — healthy. Normal collection cycle.
- Current % 30–50% — moderate concern. Collection issues are developing.
- Current % below 30% — serious problem. Most receivables are old and at risk of becoming uncollectible.
- Aged >60 days above 20% — warning. Tighten collection procedures.
- Aged >60 days above 30% — critical. Immediate collection action needed.
Frequently Asked Questions
What is a good receivables aging profile?
A healthy aging profile has 70%+ of receivables in the 0–30 day bucket and less than 10% in the 90+ day bucket. Many healthy B2B businesses maintain this ratio. If your current % is below 50% or your 90+ % is above 15%, you have a collection problem that needs attention.
How does aging relate to DSO?
DSO (Days Sales Outstanding) is the summary metric — the average collection period across all receivables. Aging analysis is the detail — the breakdown of receivables by age bucket. Aging shows you where the DSO is coming from; DSO gives you a single number to track. Use both together: DSO for trend tracking, aging for identifying specific problem accounts.
What is an allowance for doubtful accounts?
The allowance for doubtful accounts is a contra-asset account that reduces the reported value of receivables to reflect expected uncollectible amounts. It is estimated using aging analysis: applying a higher write-off percentage to older buckets. For example, 1% of 0–30 day, 5% of 31–60 day, 10% of 61–90 day, and 50% of 90+ day receivables. This calculator uses a similar approach in the "estimated uncollectible" output.
How do I improve my aging profile?
Several levers: invoice immediately after delivery (not monthly), send statements regularly, follow up promptly on overdue invoices, offer early payment discounts (2/10 Net 30 is common), require deposits or prepayments for new customers, and stop supplying customers with severely overdue balances. In most businesses, the biggest single improvement comes from consistently following up on receivables in the 31–60 day bucket — before they become 61+ days.
Does aging analysis apply to service businesses?
Yes — any business that invoices on credit has receivables that can be aged. Service businesses often have fewer, larger invoices, so aging analysis can be even more important. A professional services firm with 5 large invoices aged 90+ days is in a very different position from one with 50 smaller invoices all aged under 30 days.
How often should I run an aging report?
Monthly is standard for most businesses. Some larger companies run aging weekly during tight cash periods. The report should be reviewed by management and used to drive collection actions — sending reminders, escalating problem accounts, or making decisions about stopping supply. An aging report that is generated but not acted on has no value.