How to read your aged receivables report

The aged receivables (sometimes called aged debtors or AR aging) report is one of those bits of accounting output that most owners glance at and few really use. That’s a missed opportunity. It tells you, in one screen, exactly how much money is owed to your business, who owes it, and how long they’ve been sitting on it.

It’s also the very first document any invoice finance provider asks for. Knowing how to read it properly — and how a funder reads it — gives you a real edge in conversations about your business.

What the report actually shows

An aged receivables report is a list of every customer who owes you money, with the outstanding balance broken down into aging buckets based on how long each invoice has been overdue.

The standard buckets in NZ accounting software are:

Bucket	What it means	What it tells you
Current	Invoiced but not yet due (within agreed terms)	Healthy. This is the money you’ll see soon.
1–30 days	1–30 days past the due date	Normal slippage for most NZ businesses. Some chasing required.
31–60 days	1–2 months overdue	Active follow-up needed. Customers in this bucket need a phone call, not just an email.
61–90 days	2–3 months overdue	Risk territory. Likely needs a payment plan, escalation, or formal demand.
90+ days	More than 3 months overdue	Probability of full recovery is dropping fast. Treat as a writeoff candidate unless there’s a clear plan.

Any decent accounting package — Xero, MYOB, Reckon, QuickBooks — can produce this report in under a minute. You can usually run it as at any historical date too, which is useful for spotting trends.

The first numbers to look at

Before you dive into individual customers, check three things:

1. The total outstanding

This is the total you’re owed across all customers. It’s your accounts receivable balance. Compare it to a typical month’s revenue. If you’re owed more than 1.5x a month’s revenue, that’s a sign customers are paying slowly across the board — which usually means there’s a real cash-flow problem hiding under the surface.

2. The percentage in each bucket

For a healthy NZ B2B business, a rough benchmark looks like this:

• ~70%+ in Current and 1–30 days — this is good.
• ~15–20% in 31–60 days — manageable, but watch.
• <10% in 61–90 days — anything more is a credit-control issue.
• <5% in 90+ days — anything more and you’ve probably got real bad-debt risk.

If 30%+ of your AR is sitting in 60+ days, your debtor management is broken — not just slow.

3. Concentration

Sort the report by outstanding balance. If your top 3–5 customers represent more than 50% of your receivables, you’re carrying real concentration risk: one of those customers going slow (or going bust) hurts you disproportionately. This is one of the things funders weigh heavily when assessing your facility.

What we look for when you send us yours

When a prospective client sends us an aged receivables report, our team scans for several things in the first minute:

1. The shape of the aging. We expect to see most of the balance in Current and 1–30 days. If it’s skewed older, we’re asking why.
2. Customer concentration. We’re looking at the biggest balances and what proportion of total AR they represent.
3. Customer quality. Are these customers we’d want to fund — reputable NZ companies, government bodies, established trade names? Or unfamiliar entities we’d need to investigate?
4. Disputed amounts. Older invoices often have a story attached — a dispute, a credit, a partial payment that wasn’t allocated. Honest commentary on these makes a much better first impression than us discovering them later.
5. Trends. If you’re open to it, we’ll ask for a couple of months of historic reports so we can see whether your aging is improving, stable, or drifting.

None of this is a pass-fail test — it’s context. A business with a slightly stretched aging that’s being actively worked is far more fundable than one with clean-looking numbers and no engagement with debtors.

Red flags worth catching early

Things that should set off alarm bells when you look at your own report:

• The same customers showing up in 60+ every month. They’re training you. Either change terms, escalate, or stop selling on credit.
• A growing 90+ bucket. Old debt rarely improves. If it’s growing month-over-month you’re losing the recovery race.
• Round-number balances that never shift. Often an unbilled credit, a misallocated payment, or a dispute everyone has stopped talking about. Investigate.
• One customer disproportionately big. Your biggest customer is probably also your biggest single point of failure. Plan for what happens if they go slow.
• A stretched balance with no commentary. If your accounts team can’t tell you the story behind a large old balance in 30 seconds, the customer can.

How to actually improve your aging

Most of this isn’t complicated:

• Send invoices the day the work is finished, not at month-end.
• Make sure your invoice has clear payment terms, due date, bank account, and reference instructions.
• Send statements monthly, on a fixed cycle. Customers pay statements faster than they pay individual invoices.
• Phone — don’t email — anyone over 30 days. Email at 60+ days is performative; only a phone call works.
• Tighten terms with new customers and any customer who’s been late more than once.
• Charge interest on overdue accounts where your terms allow. The threat alone often works.

If doing all this consistently is unrealistic for your team, that’s exactly when factoring or invoice finance pays for itself — we do it for you.

The bottom line

Your aged receivables report is the closest thing your business has to a vital-signs monitor. Five minutes a week looking at it — really looking at it, not just glancing — will catch most cash-flow problems before they become survival problems.

And when you talk to us, send the report first. It tells us more in 60 seconds than a 20-minute pitch ever could.