Part 3: Using AI to see trouble coming · MODULE 16
An aged receivables report lists what each customer owes you, split into columns by how long it's been owing. Set it to age by due date, and the columns tell you exactly how overdue each balance is. Ten minutes with it every Monday shows you who to contact this week, which customers are drifting, and how much of your cash is at risk.
5 MIN READ · UPDATED 10 OCTOBER 2026
IN THIS MODULE
What the report shows
Due date or invoice date?
Reading an example
Five checks every Monday
Keeping the report accurate
Common questions
What does an aged receivables report show?
Xero has two versions. The Aged Receivables Summary shows one row per customer, with their balance split into ageing columns. The Aged Receivables Detail lists every unpaid invoice underneath each customer. Start with the summary to see where the problems are, then use the detail to find the invoices behind them.
The columns are typically "Current" for amounts not yet due, then buckets of roughly a month each, with "Older" catching everything beyond the last bucket. You can change the number and length of the ageing periods in the report settings.
Should you age by due date or invoice date?
Age by due date. That way, "Current" means not yet due and every other column is a measure of how late the money is. Ageing by invoice date mixes up two things: an invoice on 30-day terms will sit in the first month column even though it isn't late, which makes the report look worse than it is for long-term customers and better than it is for short-term ones.
Reading an example report
Aged receivables summary, aged by due date:
Customer A is a regular who's a bit slow. Most of their balance is current or recently overdue. A reminder and a call will likely sort it.
Customer B is the real problem. Every column has money in it, and the balance gets bigger the further back you go. They've been falling behind for months. Call them this week and agree a plan.
Customer C is fine.
Customer D has one old invoice and nothing new. That's either a dispute nobody resolved or a customer who's stopped responding. Find out which, then decide between fixing it and a letter of demand.
Across the business, $32,350 of the $37,430 is overdue, about 86%, and $6,750 is in the oldest column. Those two numbers are worth writing down each week.
Five checks to do every Monday
Is the total overdue going up or down compared with last week?
Has anything new moved into the oldest column? Deal with it before it gets older.
Which customers have money in three or more columns? They're falling behind on more than one invoice.
Does one customer owe a large share of the total, say a quarter or more?
Are there old, small balances that are really disputes or errors? Resolve them so they stop cluttering the report.
The free bad payer analyser runs these checks for you from an export of this report and sorts customers into who needs a reminder, a call or a letter of demand.
Keeping the report accurate
A report full of old errors trains you to ignore it. A quick tidy-up once a quarter keeps it trustworthy.
Apply credit notes and overpayments to the invoices they relate to, so they don't show as separate balances.
Void invoices that were raised in error, rather than leaving them to age.
Record part payments against the right invoice as soon as they arrive.
Write off debts that are genuinely bad, following the rules in Module 21, so the report reflects money you can still collect.
AI PROMPT
Below is my aged receivables summary from Xero, aged by due date, for an Australian small business on [14]-day terms. Customer names are replaced with codes.
1. Tell me the total owed, the total overdue, and the amount in the oldest column, as dollars and percentages.
2. List customers with money in three or more columns.
3. List any customer who owes more than 25% of the total.
4. List small, old balances that might be disputes or errors I should check.
5. Suggest the five customers I should contact first this week and why.
[Paste the report]
Common questions
What is an aged receivables report?
An aged receivables report lists the money each customer owes you, split into columns by how long it's been owing, such as current, under one month, one month, two months and older. It shows at a glance which customers are paying late and how much of your cash is at risk.
Should I age receivables by due date or invoice date?
Age by due date. That makes "Current" mean not yet due, and every other column a measure of how overdue the money is. Ageing by invoice date can make customers on longer terms look late when they aren't.
How often should I check aged receivables?
Weekly. A ten-minute look every Monday is enough to spot who to contact, whether the overdue total is rising and whether anything new has moved into the oldest column. Compare each week with the last rather than reading the report in isolation.
