The following article is offered for informational purposes only, and is not intended to provide, and should not be relied on, for legal or financial advice. Please consult your own legal or accounting advisors if you have questions on this topic.

Keeping track of unpaid invoices can be overwhelming, but aging reports give you a clear, easy to access view of your receivables. By breaking down overdue accounts into time periods, this simple tool helps businesses protect cash flow, prioritize collections, and strengthen financial health.

What is an Aging Report?

An aging report, also known as an accounts receivable (AR) report, is a financial tool that shows how long customer invoices have been outstanding. Rather than just listing balances, an aging report actually categorizes receivables by time periods, such as current, 30 days past due, 60 days, and beyond.

This makes it easier for business owners to quickly see:

• Which customers are paying on time
• Which accounts are falling behind
• Where potential cash flow risks exist

In short, an aging report acts as a pulse check on the health of your receivables and, ultimately, your business’s financial stability.

Why Aging Reports Matter

Tracking overdue invoices isn’t just about chasing payments. It’s about understanding cash flow, customer reliability, and overall financial health. Businesses that actively use aging reports gain several advantages:

• Better cash flow forecasting: Anticipate payment delays before they become problems.
• Stronger customer relationships: Identify clients who may be struggling and proactively work with them.
• Smarter collections strategy: Focus energy on accounts most at risk of nonpayment.
• Risk mitigation: Spot patterns that may indicate a need to tighten payment terms or adjust credit policies.

With Flex’s invoicing and bill pay tools, businesses can simplify this process by generating clear records of what’s owed and when, while also providing customers flexible ways to pay. Plus, the Flex Invoicing tool has a built-in dashboard that automatically tracks the status of your invoices and updates them as they’re paid.

Example of an Accounts Receivable Aging Report

Here’s a simplified example of how invoices appear in an aging report:

This type of breakdown helps you see at a glance which invoices need urgent attention.

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How to Use an Aging Report

Once you generate an AR report, the next step is action. This comes into play most often for overdue payments. Make sure to set clear payment terms with your customers, so they’re aware of exactly when their invoice payments are due. 

Here’s how businesses typically use aging reports to keep up with outstanding invoices:

1. Review Accounts with Up-to-Date Payments

Identify customers paying on time. These accounts require little follow-up, but they’re important for maintaining steady cash flow.

2. Flag Accounts in the 1–30 Day Range

Depending on payment terms, these may be approaching or slightly overdue invoices. A friendly reminder or automated email through your invoicing system is often all that’s needed at this stage.

3. Take Action on 31–60 Day Accounts

At this stage, the likelihood of late payments is higher. Prioritize outreach, like further emails or more direct collection measures may be necessary.

4. Escalate 61–90 Day Accounts

If your payment terms are at net-30 or net-60, you may be nearing the need for stronger follow-ups. Work with your collections process to prevent further risk. Consider adjusting credit terms for these clients going forward.

5. Address 90+ Day Accounts

These accounts may represent serious risk. Businesses often consider collections agencies or write-offs at this stage.

With Flex’s invoicing platform, you can track outstanding invoices, send reminders automatically, and offer easy payment options, including ACH, wire transfer, and credit card payments*, to reduce the number of accounts slipping into the 31–60 or 90+ categories.

The Link Between Aging Reports and Cash Flow

Cash flow is the lifeblood of any business. Even profitable companies can face financial strain if receivables aren’t collected promptly. An aging report helps you:

• Predict short-term cash flow gaps
• Adjust spending or borrowing decisions
• Align accounts payable with accounts receivable
• Strengthen budgeting and forecasting

Flex makes this process even more effective by allowing you to:

• Use Bill Pay to schedule outgoing payments strategically.
• Take advantage of extended float periods on the Flex Credit Card to align expenses with incoming revenue.
• Gain visibility into both receivables and payables in one place.

Tips to Improve Accounts Receivable Management

• Automate invoicing to reduce delays.
• Send payment reminders as soon as invoices age past due.
• Offer flexible payment options so customers can pay more easily.
• Regularly review AR reports to spot patterns early.
• Leverage tools like Flex to centralize payments, track timelines, and smooth cash flow.

Final Thoughts

An aging report isn’t just an accounting document. It’s a roadmap for smarter business decisions. By helping you identify overdue invoices, prioritize collections, and anticipate risks, aging reports give you control over cash flow and growth.

With Flex’s integrated Invoicing and Bill Pay solutions, you can reduce overdue accounts, maintain healthy cash flow, and focus on growing your business with confidence.