An ageing report categorises accounts receivable or accounts payable by the length of time invoices have been outstanding, typically in 30-day buckets (current, 30, 60, 90+ days).
The ageing report is one of the most critical tools in accounts receivable and accounts payable management. For AR, it shows you which customer invoices are current and which are overdue, broken into time buckets. This helps you prioritise collection efforts and identify customers who consistently pay late. For AP, the ageing report shows what you owe and when it is due, helping you manage cash flow and avoid late payment penalties. Most ageing reports use 30-day periods: Current (not yet due), 1-30 days overdue, 31-60 days, 61-90 days and 90+ days. The longer an invoice goes unpaid, the less likely it is to be collected - invoices over 90 days old should be seriously evaluated for bad debt provisioning. In Xero, ageing reports are available for both receivables and payables. SortBooks' AI CFO can show you who owes you money and which invoices are overdue, using live Xero data.
SortBooks helps with the bookkeeping behind ageing report by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing ageing report by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
Accounts receivable (AR) is the money owed to your business by customers who have purchased goods or services on credit. It is a current asset on your balance sheet.
Accounts payable (AP) represents the money your business owes to suppliers and vendors for goods or services received but not yet paid for. It is a current liability on your balance sheet.
Bad debt is money owed to your business that you determine is uncollectable. Writing off bad debt removes the amount from accounts receivable and records it as an expense.
Cash flow is the movement of money in and out of your business. Positive cash flow means more money coming in than going out. It is often considered more important than profit for business survival.
An invoice is a document sent to a customer requesting payment for goods or services provided. It includes details of the transaction, payment terms and the amount due.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.