What this form is for
Lenders require an Accounts Receivable Aging Report to assess the quality and collectability of money your customers owe you, helping them determine how much working capital your business truly has available. This report groups outstanding invoices by how long they have been unpaid, giving banks a clear picture of cash-flow health.
Before you start
- Pull your accounting software's AR aging report or prepare a spreadsheet listing every unpaid customer invoice with invoice date, due date, and amount owed.
- Have your complete customer list with current contact information and account numbers.
- Gather documentation for any disputed invoices, partial payments, or credit memos issued in the past 120 days.
- Identify any receivables from related parties, affiliates, or owner transactions that must be disclosed separately.
- Confirm your standard payment terms so you can accurately classify invoices into the correct aging bucket.
Step-by-step
1. Enter your business legal name, address, report date, and the reporting period covered at the top of the form.
2. List each customer with outstanding balances in the left column, using their full legal or registered business name as it appears on invoices.
3. For each customer, distribute their unpaid invoice totals across the five aging buckets: Current means not yet due or due within terms, 1-30 days past due, 31-60 days past due, 61-90 days past due, and 91-120 days or more past due.
4. Calculate and enter the row total for each customer by adding all five bucket amounts together.
5. After listing all customers, total each aging column vertically to show the grand total owed in each bucket.
6. Calculate the grand total of all receivables by summing the five column totals, and verify it matches the sum of all customer row totals.
7. Add a percentage row showing what portion of total AR falls into each aging bucket, calculated by dividing each column total by the grand total.
8. Flag any receivables older than 90 days with a note explaining the reason for delay and expected collection date if known.
9. Attach a separate schedule listing any receivables you consider uncollectible or have written off in the past 12 months.
10. Sign and date the report, certifying the amounts are accurate as of the report date.
What lenders look for
- Banks view anything past 60 days as questionable and past 90 days as potentially uncollectible, so expect heavy discounting of older buckets when calculating your borrowing base; keep at least 70 percent of receivables in the Current and 1-30 buckets for strong loan terms.
- Concentration risk matters: if one customer represents more than 20 percent of your AR total, underwriters will require additional documentation about that relationship and may exclude it from eligible collateral.
- Illinois lenders typically require monthly AR aging updates as a loan covenant, and repeated patterns of aging receivables can trigger default provisions or reduced credit lines.