AR aging (accounts receivable aging)
Also known as: accounts receivable aging, AR report
Report categorizing outstanding customer invoices by how long they've been unpaid (current, 30 days, 60 days, 90+ days). The standard tool for managing collections.
Accounts receivable aging is a report that categorizes outstanding customer invoices by how long they've been unpaid. Standard buckets: Current (not yet due or under 30 days from issue), 30-60 days, 60-90 days, 90+ days.
The aging report is the foundation of collections management. Healthy AR aging for residential service: 80-90% in current bucket, 5-10% in 30-60, 2-5% in 60-90, under 2% in 90+. Numbers significantly worse signal collection problems requiring intervention.
For service operators, AR aging review (weekly is typical) drives collection actions. Standard escalation: invoices in current bucket get standard reminders; 30-60 day invoices get personal outreach; 60-90 day invoices may require a phone call from a manager; 90+ day invoices typically transition to formal collections (in-house dedicated effort, third-party collections service, or write-off as bad debt).
The quality of AR aging is largely a function of upfront practices: clear payment terms at quote, deposit collection on large jobs, payment-link invoicing rather than mailed paper invoices, automated reminders, card-on-file for repeat customers. Operations with poor AR aging usually have problems at the front end — billing happens slowly, payment terms aren't communicated, no payment infrastructure makes paying difficult. Fixing AR aging usually means fixing those upstream problems.
Related terms
Days sales outstanding (DSO)
Average number of days between invoice date and customer payment date. Lower is better; healthy residential service operations run 7-21 day DSO.
Cash conversion cycle
Number of days between when cash leaves the business (paying for parts and labor) and when cash returns from customer payment. Shorter is better for working capital.