Aging Accounts Receivable

Aging is the process of categorizing accounts receivable by time periods. It shows how long you have held an asset or how long a bill has gone unpaid — giving you a clear picture of which customers are current and which are overdue.

Setting up receivable accounts

The first step is to create a receivable account for each customer you want to track.

Imagine you sold a product to two customers — John will pay in two installments and Kate will pay at once.

Recording the sales

Record the products or services you sold, which builds up the receivable balance for each customer.

Scheduling expected payments

If you want planned collections to appear on the timeline, you can record future-dated payment transactions at the dates you anticipate receiving them. Treat these as expected settlements, not proof that cash has already been collected, and update or remove them if the customer pays a different amount or on a different date.

Monitoring collection status

Check whether you received all payments by reviewing the receivable balance. A zero balance means the customer has paid in full, while an outstanding balance tells you exactly how much is still owed and for how long.

Tip

By keeping one receivable account per customer, you can see at a glance who has paid, who is overdue, and by how much — making follow-up straightforward.