Updated 2026-05-19 · By Dana Whitfield

Aging reports

An aging report groups unpaid invoices by how long they have been outstanding.

An aging report is a schedule that groups a business's outstanding invoices by how many days they have been unpaid since the invoice date or due date. It is one of the most fundamental documents in receivables management and factoring: it shows what is owed, by whom, and how long it has been outstanding.

The typical aging report uses time buckets: current, 1-30 days, 31-60 days, 61-90 days, and over 90 days. The distribution across these buckets tells a factor a great deal about the business's customer payment behavior. A portfolio concentrated in the current and 1-30 day columns suggests customers pay reliably within terms. Heavy balances in the 61-90 or over-90 columns suggest chronic slow payment or collection problems.

Factors use the aging report in two ways: first, as part of the initial underwriting process before approving a factoring program, and second, on an ongoing basis to monitor the portfolio they are funding. The initial review reveals which customers pay on time, which are consistently slow, and what the average collection cycle looks like across the business's receivable base. That information informs credit limits, advance rates, and reserve requirements.

Invoice eligibility often depends directly on where an invoice falls in the aging report. Most factoring programs will not fund invoices past a certain age threshold—commonly 60 or 90 days from invoice date—even if the customer is otherwise approved. Once an invoice crosses that threshold, it becomes ineligible regardless of the customer's general creditworthiness.

Customer concentration shows clearly in an aging report. If a single customer represents 50 percent of total outstanding receivables, the aging report makes that concentration visible. Many factors apply concentration limits—rules that cap how much of the total funded portfolio can be from a single account debtor. An aging report with high concentration in one customer can trigger a review, a reduced advance rate, or an eligibility cap.

Dilution also appears in the aging report over time. If a customer consistently pays less than the full invoice amount—due to deductions, returns, or offsets—the pattern shows up as recurring short balances in the aging buckets. The factor uses this pattern to estimate the business's dilution rate, which feeds into advance rate calculations and reserve requirements.

Businesses running a factoring program should reconcile their own accounts receivable records against the factor's aging report regularly. Discrepancies can indicate misdirected payments, invoices paid directly to the seller rather than the factor, or collection disputes not formally reported. Catching reconciliation gaps early prevents reserve disputes and chargeback surprises later.

When a factor requests a current aging report before onboarding a new business, the business should review it before submitting it. Invoices already past 90 days, customers with disputed balances, or large concentrations in a single account are all things the factor will notice. Addressing those issues proactively—or at least being prepared to explain them—makes the onboarding conversation more efficient and reduces the chance of program terms being set more conservatively than necessary.