What a debtor ageing report shows
A debtor ageing report lists every customer with an outstanding balance and groups each amount into time buckets based on how long it has been overdue. Most accounting systems use four or five buckets: Current (invoices not yet past their due date), 1–30 days overdue, 31–60 days, 61–90 days, and 90+ days. Some systems add a 120+ days bucket for very old debts.
The following is an example report. Customer names and amounts are illustrative only.
| Customer | Current | 1–30 days | 31–60 days | 61–90 days | 90+ days | Total |
|---|---|---|---|---|---|---|
| Acme Pty Ltd | $4,200 | $1,100 | — | — | — | $5,300 |
| Bridgeway Trading | — | $2,750 | $3,400 | $1,800 | — | $7,950 |
| Crawford Industries | $8,500 | — | — | $5,200 | $12,600 | $26,300 |
| TOTAL | $12,700 | $3,850 | $3,400 | $7,000 | $12,600 | $39,550 |
How to read each column
Current: These invoices have not yet passed their due date. No immediate action is required, but if a customer's current balance is unusually high relative to their history, it is worth monitoring.
1–30 days overdue: The invoice has passed its due date but is still relatively recent. Most businesses start with an automated reminder at this point. A phone call is warranted if the automated reminder is ignored.
31–60 days overdue: This is when debts start to become a problem. An overdue account statement should have been sent. If it was ignored, a formal letter of demand is now appropriate.
61–90 days overdue: A letter of demand should have been sent. If there has been no payment or response, consider referring the account to a recovery agency.
90+ days overdue: Refer urgently. The longer a debt sits in this column, the lower the recovery rate. Statistical data on commercial debt recovery consistently shows that debts older than 90 days recover at a significantly lower rate than fresh debts.
The "concentrate on the right-hand columns" rule
It is natural to focus on large balances in the Current column — they feel like the biggest risk. But the right-hand columns deserve your attention first. A $2,000 debt that is 90 days overdue is harder to recover and more likely to be lost entirely than a $10,000 current debt that will be paid in a week.
Prioritise your collections effort in this order: 90+ days first, then 61–90 days, then 31–60 days. Do not let the urgency of recent invoices draw your attention away from old ones.
Red flags in an ageing report
- An account appearing in the 90+ column for a second consecutive month — this means no payment has been received at all
- A single customer making up more than 20% of your total outstanding receivables — concentration risk
- Total overdue receivables growing faster than sales — your collections process is not keeping up with your growth
- A customer making small, regular payments that never clear any specific invoice — a stalling tactic to avoid a formal overdue notice
- An invoice appearing across multiple buckets over several months — the debt is ageing without action
How often to run the report
For businesses with more than 10 active accounts receivable, run the ageing report at least weekly. Monthly is insufficient — a debt can move from 30 days to 60 days to 90 days in the gap between monthly reviews, and by the time you notice it, the window for easy recovery has closed.
Set a calendar reminder at the start of each week to run the report and review the 60+ day columns. Assign someone to action any new entries.
What to do for each bucket
| Overdue period | Typical action | Time to refer to Merion? |
|---|---|---|
| 1–14 days | Automated reminder email | No — follow internal process |
| 15–30 days | Phone call; second reminder | No — but flag the account |
| 31–60 days | Formal overdue statement; letter of demand | Consider if debtor is evasive or unresponsive |
| 61–90 days | Letter of demand; final notice | Yes — if no response to letter of demand |
| 90+ days | Final notice; refer externally | Yes — urgently |
Related tools: Days overdue calculator · Debt age impact calculator