Choose the aging basis first
A due-date aging report measures lateness. An invoice-date report measures time since issuance. Both can be useful, but they answer different questions.
For due-date aging:
Days past due = max(0, report date - contractual due date), measured in calendar days.
Treat invoices due today or later as current in the example convention below. Apply a consistent reporting date, time zone, and boundary rule.
Example bucket structure
| Status | Days past due |
|---|---|
| Current | Due today or in the future |
| Early overdue | 1-30 |
| Overdue | 31-60 |
| Later overdue | 61-90 |
| Long overdue | 91+ |
These are example ranges, not mandatory industry or legal thresholds.
Worked example
On October 23, an unpaid invoice due October 1 is 22 days past due and belongs in the 1-30 bucket. An invoice due November 1 remains current.
If $400 has been applied to a $1,000 invoice, age the remaining $600, subject to approved credits and other adjustments.
Avoid common reporting errors
Use nonoverlapping ranges so an invoice appears once. Distinguish invoice aging from customer-level aging, since one customer may have balances in several buckets. Show disputes, unapplied receipts, and legal restrictions separately rather than inferring treatment from age alone.
Compare movements between buckets alongside receipts, credits, and write-offs. A declining overdue total does not necessarily mean that cash was collected.
Related terms: Outstanding Balance and Unpaid Invoices.