Reading the buckets
Accounts receivable aging is the report that groups unpaid invoices by age. In QuickBooks Online it comes in two forms: the A/R Aging Summary, one line per customer with a column per bucket, and the A/R Aging Detail, one line per invoice. The summary tells you the shape of the problem. The detail tells you who to call.
The buckets carry different meanings. Current is money that is not late; it is next month's cash if your customers behave. The 1-to-30 bucket is normal slippage for most businesses on 30-day terms, and the size of it relative to current tells you how your customers actually pay. The 31-to-60 bucket is where invoices go when nobody chased them at 30 days. Past 60, the odds of collecting fall each week, and past 90 you are dealing with a dispute, a customer in trouble, or an invoice that went to the wrong inbox in April and has been sitting there since.
A commercial cleaning company with 41 staff has $241,600 outstanding across 63 invoices: $118,900 current, $67,300 in 1 to 30, $31,800 in 31 to 60, $12,200 in 61 to 90 and $11,400 over 90. Nearly half is current, which is healthy. The $55,400 past 30 days is the part that needs an owner's attention, because that is roughly one payroll.
What a growing 90-plus column means
A 90-plus balance that grows month over month is rarely about this month's customers. An invoice takes three billing cycles to get there, which means three chances to call were missed. Usually it means one of two things: a customer or two who are in real trouble, or a collections process that belongs to nobody because the office manager also runs payroll and the bookkeeper is outside the building. Either way, the fix starts with deciding who owns the follow-up on Tuesdays.
Both are common. The QuickBooks 2026 Late Payments Report found 59 percent of small businesses had invoices more than 30 days overdue, up from 47 percent the year before, with an average of $17,700 owed, and 42 percent had delayed paying their own vendors as a result. Those two numbers are connected by the aging report, and by whether anyone reads it before month end.
Turning the report into this week's chase list
Most advice says to start with the oldest invoices. We would start with the largest invoices that are about to slip, because a 90-day invoice from a customer who has stopped answering is a collections case, and a $28,000 current invoice that is about to go 30 days late is a cash flow lever. Rank by size, then age, then what you know about the customer. Five calls is the right number. More than that in a week and none of them gets made.
| Invoice | Amount | Days past due | Why it is on the list |
|---|---|---|---|
| Property management firm, monthly contract | $28,400 | 12 | Largest single invoice; usually pays at 30 but the approver changed in June |
| Regional hospital system, two invoices | $19,700 | 38 | Pays reliably but slowly; a call to AP moves it about a week |
| Office park, first invoice on new contract | $14,200 | 3 | New customer; confirm the invoice reached the right inbox and has the PO number |
| Restaurant group, three locations | $9,600 | 71 | Two promised dates missed; decide on a hold before the next service date |
| School district, two invoices | $14,000 | 0 | Due Friday; the district pays in 45 days unless the PO is on the invoice |
Five calls cover $85,900, about a third of the book, and four of them are about keeping invoices from aging rather than rescuing ones that already have. The 90-plus balance of $11,400 gets a separate conversation: forecast it at zero, decide customer by customer, and write off what is not coming so the total means what it says.
From aging to next month's cash
The aging report is the receipts line of a 13-week cash flow forecast, once you apply a collection rate to each bucket. For the cleaning company, its own history says about 80 percent of current invoices arrive within four weeks, 70 percent of the 1-to-30 bucket, 45 percent of 31 to 60, 25 percent of 61 to 90, and nothing from 90-plus until it lands. That gives expected receipts over the next four weeks of $159,600 from a $241,600 book. If the forecast needs $170,000 to clear two payrolls and the rent, the chase list above is where the gap closes, and the owner knows that on the Monday rather than the Friday.
Those percentages are the company's own, worked out from a year of aging reports set against deposits. Yours will differ. The method cannot tell you a customer is about to stop paying; only the customer's behavior over the last two invoices can. What it does is turn a backward-looking report into a number you can act on.
DSO, quickly
Days sales outstanding is the average number of days it takes to collect an invoice: accounts receivable divided by average daily credit sales over a period, usually 90 days. The cleaning company billed $531,000 in the last 90 days, or $5,900 a day, so $241,600 of receivables is a DSO of 41 days against 30-day terms. Invoiced, which sells billing software, suggests aiming for 45 days or under, with medians around 6 to 7 days in retail and about 82 in construction and engineering. At 41 the company is inside the target and about 11 days past its own terms. The second comparison is the useful one. DSO averages the customer who pays in 20 days with the one who pays in 95, so it can drift upward for months while the summary looks flat. Track it monthly and read it alongside why net income and the bank balance disagree, because a rising DSO is the receivables line in that bridge getting bigger.
Credit holds, and the customer who owes two of your companies
A credit hold is a decision to stop delivering work or goods to a customer until the overdue balance is paid or a payment plan is agreed. Set the rule before you need it. The usual one is an invoice past 60 days with a missed promise, or total exposure above a fixed dollar amount, and it applies whoever the customer is. A rule decided in advance is easier to enforce than a judgment made at 90 days with the customer on the phone.
Owners with several companies have a version of this the single-company advice misses. The hospital system above owes the cleaning company $19,700 and the owner's maintenance company $8,300. Two aging reports, two people chasing, and neither knows the exposure is $28,000, though the customer's accounts payable department does. Read the reports together, chase once, and set the hold on total exposure. The other multi-entity trap is the invoice from your own property LLC to your operating company sitting in the aging at 120 days. That is a due-from balance, not a collection problem, and it belongs out of the aging so the 90-plus column means something.
Navigator shows AR and AP aging per company and for the group on every plan, read from QuickBooks Online each morning, so the two hospital invoices appear as one customer with one balance, and you can ask in Slack or Teams who owes the most and for how long and get an answer that names the invoices it came from. It reads the files and does not make the calls. The trial connects in about fifteen minutes with no card: navigatorhq.ai.
Questions owners ask
What are the typical AR aging buckets?
Current, 1 to 30 days past due, 31 to 60, 61 to 90 and over 90. QuickBooks Online uses these by default and lets you change the interval and the number of buckets. Some businesses age from invoice date rather than due date, which makes every invoice look older; check which one your report uses before comparing it with anyone else's.
How often should I run the aging report?
Weekly, on the day you make collection calls, and with payments applied first. A monthly aging read at close is a history lesson. A weekly one is a call list and the receipts line of your cash forecast. If the bookkeeper applies payments only at month end, the weekly report will show invoices as open that were paid two weeks ago.
What does a large 90-plus balance mean?
That the collections process stopped working some time ago, not this month. An invoice reaches 90 days past due after three cycles of statements and calls. A growing 90-plus column usually means one or two customers are in trouble, or that nobody owns the follow-up. Forecast the balance at zero, decide on each customer, and write off what is not coming.
What is a good DSO?
It depends on your terms and your industry. Invoiced puts the general target at 45 days or under, with retail medians of 6 to 7 days and construction and engineering around 82. A DSO more than 15 days above your stated payment terms means customers are setting the terms, not you. Track your own DSO month to month; the trend tells you more than the benchmark.
When should I put a customer on hold?
When an invoice passes 60 days and the customer has missed a promised payment date, or when total exposure exceeds what you could afford to lose. A credit hold means no new work until the balance is cleared or a payment plan is agreed. Decide the rule in advance and apply it evenly; deciding case by case at 90 days is how the 90-plus column grows.
Related
The aging report feeds the receipts line of the 13-week cash flow forecast, which is where the chase list turns into a payroll decision. If the P&L says you are profitable and the account says otherwise, why net income doesn't match your bank balance usually finds the answer in this report. Contractors carry a harder version of the problem, with retainage and progress billing, covered in construction company cash flow problems.
If you are not sure whether payments are being applied often enough for the aging to be trusted, the free accounting health check is a good place to start: navigatorhq.ai/health-check.
Published . Last updated . Reviewed by a CFO on the Navigator team.