Glossary/accounts receivable

Accounts Receivable Aging

An accounts receivable aging report buckets every unpaid customer invoice by how long it has been outstanding — typically current (0–30 days), 31–60, 61–90, and 90+ days. The bucket distribution shows the health of collections: the more revenue sitting in 60+ buckets, the more cash is at risk.

In Detail

AR aging is the most useful day-to-day collections tool a small business has. It is generated by every accounting system (QuickBooks, Xero, NetSuite) and lists every open invoice grouped by how overdue it is relative to its due date. Owners use the report to decide which customers to call this week, how to forecast cash conviction (current bucket is almost certain, 60+ is risky), and whether to extend credit to new customers. Collections health is measured by what percentage of total AR sits in each bucket — a healthy SMB usually has 80%+ in the current bucket and under 5% in 90+.

Formula

AR Aging = Sum of unpaid invoices grouped by (Today − Due Date) into buckets: 0–30, 31–60, 61–90, 90+

Why It Matters for Small Businesses

The AR aging report is the difference between guessing about cash and knowing about it. The 90+ bucket is where invoices die — every additional 30 days an invoice ages, the probability of collection drops sharply. A $25K invoice in the current bucket is worth nearly the full amount in expected cash. The same invoice in 90+ days is worth maybe 60 cents on the dollar after collection effort. Owners who do not look at aging weekly tend to discover the cash hole only after payroll bounces.

How Fynso Helps

Fynso reads your AR aging from QuickBooks every day and surfaces the report inside the daily brief — but ranked by what to act on, not just by amount. The largest 90+ invoices get a drafted follow-up email tone-matched to the customer's payment history. The system distinguishes between customers who always pay 15 days late (cash conviction stays high) and customers slipping into a new pattern (real risk). When AR aging trends are getting worse week over week, Fynso flags it before it shows up in the bank balance.

Industry Examples

Dental practices

A dental practice's aging is dominated by insurance receivables, where 60-day buckets are normal because of carrier processing time. The signal that matters is the 90+ bucket — claims that old usually mean a denial that was never appealed, and they need to be written off or fought before the appeal window closes.

Professional services

An agency on net-30 terms expects nearly all AR to sit in the 0–30 bucket. When a single large client's invoices slide into 31–60 for two months in a row, that is a leading indicator the relationship is in trouble — the agency should call before the next project ships.

B2B SaaS

A sub-$5M SaaS business invoices annually upfront. Aging that drifts into 31–60 usually signals an autopay failure or a procurement delay at the customer side — both fixable with a quick call, but only if the AR aging is being watched weekly.

Frequently Asked Questions

How often should I review AR aging?
Weekly at minimum. The compounding cost of letting invoices age means a quick 15-minute review every Monday usually recovers more cash than any other single owner activity. Tools like Fynso can automate the review and surface only what needs attention.
What percentage of AR over 90 days is normal?
For most healthy SMBs, under 5% of total AR sitting in 90+ is the target. Above 10% suggests collections discipline has slipped or customer credit quality has deteriorated — either way, write-offs are coming if nothing changes.
What's the difference between AR aging and DSO?
DSO (days sales outstanding) is a single number summarizing how long customers take to pay on average. AR aging shows the distribution — where exactly the unpaid invoices sit. DSO can look fine in aggregate while a dangerous concentration is hiding in the 90+ bucket; aging surfaces that risk.
How do I reduce my AR aging?
The high-leverage moves are: invoice immediately at delivery (not at month-end), automate reminders at 7, 14, and 30 days past due, require deposits for new customers, and call personally on anything over 45 days. Owners who use written reminders and a phone call together collect roughly twice as fast as written reminders alone.

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