If your profit looks good but cash is tight, the aged receivables report usually explains why. It's the most actionable report a service business has.
What is an aged receivables report?
An aged receivables (or accounts receivable aging) report lists every unpaid client invoice, grouped by how long it's been overdue:
| Bucket | Meaning |
|---|---|
| Coming due | Not yet due |
| 1–30 days | Recently overdue, usually an admin delay |
| 31–60 days | A pattern is forming |
| 61–90 days | Serious. The client may have cash problems or a dispute |
| 90+ days | At risk of never being paid |
Most reports also show a total per client, so you can see who owes the most.
How do I read it?
Ask three questions:
- How much is overdue in total? Compare it with a month of your costs.
- Where is it concentrated? One client with ₦20m in 90+ days is a bigger risk than ten small late payers.
- Is it getting better or worse? Compare with last month.
What is DSO?
Days sales outstanding (DSO) estimates how long, on average, clients take to pay:
DSO = (receivables ÷ credit sales for the period) × days in the period
Example: ₦24m receivables, ₦36m invoiced in the last 90 days → (24 ÷ 36) × 90 = 60 days. If your terms are 30 days, clients are taking twice as long.
What should I do about each bucket?
| Bucket | Action |
|---|---|
| Coming due | Make sure invoices are complete (PO, Tax ID) and sent to accounts payable |
| 1–30 days | Reminders at 3 and 7 days, ask for a payment date |
| 31–60 days | Call your senior contact, confirm there's no dispute, agree a date |
| 61–90 days | Formal letter citing the contract, pause new work |
| 90+ days | Final notice, lawyer's letter, negotiate instalments, consider write-off |
Use our payment reminder templates for the wording.
When should I write off a bad debt?
When the debt is genuinely irrecoverable: the client has closed, disputes are lost, or recovery would cost more than the debt. Keep evidence of your recovery efforts. For tax, bad debts are generally only deductible when they're proven to be bad and written off, so talk to your accountant before year end.
How do I stop invoices ageing in the first place?
- Deposits on projects and retainers billed in advance. See mobilisation fees.
- Complete invoices that pass corporate accounts payable. See the invoice checklist.
- Automatic reminders so nothing sits unchased.
- Weekly review of this report.
How BizBooks shows aged receivables
The dashboard's "Payable and owing" section shows what clients owe you in each aging bucket (and what you owe suppliers), and the Aged Receivables report breaks it down by client. Pro sends reminders automatically. See bookkeeping and reports.
Frequently asked questions
What is an aged receivables report?
A report of unpaid client invoices grouped by how long they're overdue, typically coming due, 1–30, 31–60, 61–90 and 90+ days.
What does 90+ days mean in aged receivables?
The invoices are more than 90 days past their due date. They're the least likely to be collected and need urgent action.
How often should I review aged receivables?
Weekly. Acting on 30-day items is far more effective than chasing 90-day ones.
How do I calculate DSO?
Divide receivables by credit sales for a period and multiply by the number of days in that period.