Ageing Analysis of Receivables and Payables
An ageing report classifies unpaid invoices by how long they have been outstanding past their due date. For debtors it shows which customers are slow to pay and how much may turn doubtful; for creditors it shows which suppliers you are overdue with. Banks ask for a debtors ageing statement when sanctioning working-capital limits, and auditors use it to test provisions for bad debts.
Buckets
Due date = invoice date + credit days. Days overdue = today − due date. Outstanding amounts are grouped as Not due, 0-30, 31-60, 61-90 and 90+ days overdue. The longer an invoice sits in the 90+ bucket, the lower the probability of collection.
How this tool works
Enter party, invoice number, invoice date, credit days, invoice amount and amount paid. The tool computes outstanding, days overdue and bucket for each row, then produces bucket totals, a weighted average days-overdue figure, a bar chart and a party-wise ageing table sorted by exposure. Export to Excel or CSV for sharing with your sales team or banker.
Worked example
Ramesh & Co.: INV-101 dated 95 days ago, 30 days credit, ₹45,000 unpaid → 65 days overdue → bucket 61-90. INV-118 dated 40 days ago, ₹32,000 with ₹12,000 paid → ₹20,000 outstanding, 10 days overdue → bucket 0-30. Party total ₹65,000 of which ₹45,000 is in the 61-90 bucket — time for a firm reminder.
Using the results
- Follow up 31-60 day accounts by phone; send formal notices for 61-90.
- Create a provision for doubtful debts on 90+ balances (commonly 25-100%).
- For creditors who are MSMEs, remember Sec 43B(h): dues not paid within 45 days (15 days without a written agreement) are disallowed as a deduction until paid.
- Compute Days Sales Outstanding (DSO) = receivables ÷ credit sales × 365 to track collection efficiency over time.
Frequently Asked Questions
Is the ageing based on invoice date or due date?
Due date. Buckets count days past the due date (invoice date + credit days). Invoices within the credit period appear as "Not due".
Can I use it for creditors?
Yes. Enter supplier bills instead of customer invoices; the buckets then show how overdue your payments are.
How do I record a partial payment?
Enter the amount received in the Paid column; outstanding = amount − paid.
What is a reasonable provision for doubtful debts?
Policies vary; a common pattern is 5% for 61-90 days, 25-50% for 90-180 days and 100% beyond 180 days or on disputed accounts.
Disclaimer: This tool is for general information and estimation only. Tax rates and rules change — verify with official sources or a professional before acting. Read full disclaimer.