What this form is for
Lenders use the Accounts Receivable Aging Report to assess the quality and collectibility of your outstanding customer invoices when underwriting working-capital loans, lines of credit, or receivables-based financing. It shows who owes you money and how overdue those balances are.
Before you start
- Current invoice listing from your accounting software showing all open customer balances and original invoice dates
- Customer names and account numbers as they appear in your general ledger
- Your standard payment terms for each customer (Net 30, Net 60, etc.) to accurately categorize aging buckets
- Any current payment plans, disputes, or known bad-debt accounts that affect collectibility
- Prior month's aging report if available for trend comparison
Step-by-step
1. Enter the report date at the top. This snapshot date determines how aging buckets are calculated, so use the last day of your most recent closed accounting period.
2. List each customer with an outstanding balance in the left column, using the exact legal or trade name that matches your invoices and contracts.
3. For each customer, review every unpaid invoice and place the amount in the correct aging bucket based on days outstanding from the report date: Current (0-30 days), 1-30 (past the first 30 days), 31-60, 61-90, or 91-120 days past due.
4. Calculate the row total for each customer by adding all amounts across the five aging buckets. Most accounting systems auto-calculate this; verify the math manually if preparing by hand.
5. After entering all customers, calculate column totals for each aging bucket by summing all customer balances in that bucket.
6. Calculate the grand total of all receivables by summing the five column totals. Cross-check that this matches your accounts receivable balance in your general ledger.
7. Apply your color-coding scheme consistently: typically green for Current, yellow for 1-30 and 31-60, orange for 61-90, and red for 91-120 or older.
8. Add a notes column or footer section to flag any disputed invoices, customers on payment plans, or accounts you consider uncollectible.
What lenders look for
- Banks heavily discount receivables older than 90 days when calculating your borrowing base, and New York lenders typically exclude any invoice over 120 days entirely. A report showing more than 25 percent of receivables past 60 days signals collection problems.
- Match your aging report total to your balance sheet accounts receivable line item to the penny. Discrepancies raise red flags about your bookkeeping accuracy and internal controls.
- Concentration risk matters: if one or two customers represent over 40 percent of your receivables, lenders view your cash flow as vulnerable and may require personal guarantees or lower advance rates.