What is an ageing analysis report?

An ageing report groups the money customers owe you by how long it has been outstanding — typically 0-30 days, 31-60, 61-90 and over 90 days. It converts one useless number, total receivables, into a prioritised action list, because a rupee overdue by 100 days needs completely different treatment from a rupee due next week.

What are the standard ageing buckets?

The common Indian format uses 0-30, 31-60, 61-90 and 90-plus days. Some businesses add a 180-plus bucket, which is worth doing if you carry long-overdue accounts, because it separates debts that are merely late from debts that are probably lost.

Should ageing be counted from invoice date or due date?

From the due date if you want a collection tool, because that tells you what is actually overdue. From the invoice date if you want a working capital measure, because that tells you how long your money has been out. Many systems default to invoice date — check which yours uses before you act on the numbers, or you will chase customers who are not yet late.

What is a good ageing profile?

As a rough benchmark for a healthy business: around 70 to 80 percent of receivables in the 0-30 bucket, 15 to 20 percent in 31-60, under 10 percent in 61-90, and under 5 percent beyond 90 days. If more than a quarter of your money sits past 60 days, collections need attention before anything else in your business does.

Ageing Analysis Report | How to Read It and Act

Getting Paid — an 8-part series

What an Ageing Report Is

Your receivables total is one number, and one number cannot be acted on. ₹40 lakh outstanding could be an excellent business with fast-paying customers who happen to have just been invoiced, or a failing one with three years of uncollectable debt. The total looks identical.

An ageing report splits that total by how old each amount is, and turns it into a priority list.

Party	0–30	31–60	61–90	90+	Total
Rajesh Traders	1,20,000	—	—	—	1,20,000
Gupta Enterprises	80,000	1,40,000	—	—	2,20,000
Sharma & Co	—	—	45,000	3,10,000	3,55,000
Total	2,00,000	1,40,000	45,000	3,10,000	6,95,000

Read across, and the picture is obvious in a way the ₹6.95 lakh total never was. Rajesh is fine. Gupta is drifting. Sharma is the problem, and ₹3.10 lakh of it has been a problem for a long time.

The Four Buckets

Bucket	What it means	Your posture
0–30 days	Normal trading. Most of your money should live here.	Automated reminders only. Do not spend human time here.
31–60 days	Drifting. Usually process friction rather than refusal — a missing PO number, an invoice stuck with the wrong person.	One phone call. Find the blockage and remove it.
61–90 days	A problem. At this age it is rarely an accident.	Escalate above the accounts clerk. Consider a credit hold.
90+ days	At risk. Assume nothing arrives without pressure.	Owner-level contact, credit hold, formal notice, recovery decision.

Why 90 Days Is the Cliff

Collection probability does not decline gently with age — it falls off a cliff. The broad pattern, consistent across trades:

Chased within 30 days, nearly everything is collected.
At 60 days, still high, but now it costs you calls.
At 90 days, materially lower — and falling fast.
Beyond six months, a minority is recovered, usually at a discount.
Beyond a year, recovery is the exception.

The practical conclusion: effort spent on a 45-day debt is worth several times the same effort spent on a 200-day debt. Chase the ageing debts hardest while they are young. Most businesses do the opposite — they ignore the recent ones because they are "not really late yet", and pour energy into the old ones out of anger.

Six Things the Report Tells You

Who to call today. Sort by days overdue, work top down. That is the whole prioritisation problem solved.
Whether the problem is one customer or the system. If 80% of your 90-plus bucket is one party, you have a customer problem. If it is spread across twenty parties, you have a collections process problem — and no amount of chasing that one customer will fix it.
Whether it is getting better or worse. One month's report is a photograph. Six months of reports is a trend, and the trend is what matters. Keep them.
Where your credit policy is failing. Customers repeatedly appearing in 61-90 were given terms they were never going to meet. That is a limit-setting failure, not a chasing failure — see Part 3.
What your real working capital need is. The 60-plus portion is money you have effectively lent out. Any bank assessing you will look at exactly this.
Which debts are dying. Anything ageing past 180 days needs a decision — settle, litigate or write off. Leaving it on the books to avoid the decision overstates your assets and, eventually, your profit. See Part 8.

What to Do With Each Bucket, Concretely

Bucket	Action this week
0–30	Automated WhatsApp three days before due date. No human time.
31–60	One call to the accounts contact. Ask a closed question: "will invoice 412 be released Friday or Monday?" Log the promise date.
61–90	Formal written reminder with the full statement of account. Escalate to the person who placed the order. Flag the account for credit hold at 90.
90+	Owner-to-owner contact. Credit hold applied. Claim MSME interest if you are registered (Part 5). Decide: settlement, legal notice, or write-off.

The Same Report, Pointed the Other Way

Run the ageing on your payables too. It answers a different but equally important question: who are you holding up, and what is it costing you?

Two things to look for. First, any MSME supplier approaching 45 days — because past that point you lose the tax deduction on their invoice until you pay, and you owe them statutory interest that is itself not deductible. Second, suppliers you are stretching who give you good prices; that relationship is usually worth more than the few weeks of cash.

Five Ways the Report Misleads You

Ageing from invoice date, not due date. If your system ages from invoice date and you give 30-day terms, everything in the 0-30 bucket is not overdue at all. Know which basis yours uses.
Unadjusted advances and credit notes. A customer who paid an advance that was never knocked off against the invoice shows as overdue when they are not. This makes the whole report untrustworthy, and one bad line is enough for the sales team to dismiss all of it. See Part 6.
Bounced cheques not reversed. If the receipt was posted and the bounce never was, the debt has silently vanished from the report. See Part 7.
Duplicate ledgers. "Sharma & Co" and "Sharma and Company" split one customer's exposure across two lines, so neither crosses your limit. Merge duplicates before you trust any credit limit.
Disputed invoices sitting in 90-plus. A quality dispute is not a collection problem and will never respond to reminders. Tag disputes separately so they stop distorting the picture — and so somebody actually resolves them.

Making It a Habit

The report is worthless if you open it when things feel bad. Fix it to a day.

Weekly — sort by days overdue, work the chase calendar, log promise dates.
Monthly — record the bucket percentages and debtor days. Watch the trend, not the level.
Quarterly — review everything past 180 days and make an explicit decision on each: settle, litigate, or write off.

One question, not a report run

In iAccounting the ageing report is built in, split 0-30 / 31-60 / 61-90 / 90+ on a FIFO basis. You can also just press F12 and ask "receivables ageing", or "who's overdue more than 30 days" — which returns the chase list with phone numbers attached. See The AI Assistant.

What's Next?

Part 3 — Credit Policy: stop the 90-plus bucket from filling in the first place
Part 4 — Reminder Scripts: what to actually send each bucket
Part 8 — Bad Debts: what to do when the 90-plus bucket will not move
Part 1 — Cut Your Payment Cycle

Ageing Analysis — How to Read It and Act On It