If there is one report every business owner should be able to read fluently, it is the accounts receivable ageing report. It is the clearest single picture of what you are owed, by whom, and — critically — for how long.
What the report shows
An ageing report groups every outstanding invoice into bands by how overdue it is: current, 1–30 days, 31–60 days, 61–90 days, and 90 days and beyond. Each band is a different kind of problem, and each calls for a different response.
Reading the bands
The current and 1–30 day bands are ordinary trading. A polite reminder is all most of these need. The 31–60 day band is where attention should sharpen — these accounts are drifting and benefit from a firmer, scheduled follow-up.
The 61–90 day band is the warning zone. Recovery rates begin to fall noticeably here, and an account that has been chased without result is a candidate for escalation. Anything in the 90-plus band should prompt a decision rather than another reminder: it is unlikely to resolve itself.
Turning the report into action
The value of the report is not in reading it but in acting on it. A simple rule — for example, ‘accounts past 90 days are reviewed for recovery every month’ — turns a static document into a discipline that keeps your ledger young.
If your ageing report has a heavy tail beyond 90 days, that tail is working capital sitting idle. Talk to Merion about a review.