AP Aging Report
An AP aging report (accounts payable aging report) lists all outstanding bills organized by how long they’ve been unpaid. It’s a critical tool for managing cash flow, prioritizing payments, and monitoring vendor relationships.
What AP Aging Shows
| Column | Description |
|---|---|
| Vendor name | Who you owe |
| Invoice number | Specific bill reference |
| Invoice date | When bill was issued |
| Due date | When payment is due |
| Amount | How much you owe |
| Aging bucket | How old the balance is |
Standard Aging Buckets
Bills are typically grouped by age:
| Bucket | Age | Status |
|---|---|---|
| Current | Not yet due | On track |
| 1-30 days | 1-30 days past due | Slightly late |
| 31-60 days | 31-60 days past due | Needs attention |
| 61-90 days | 61-90 days past due | Seriously overdue |
| 90+ days | Over 90 days past due | Critical |
Sample AP Aging Report
Summary View
| Vendor | Current | 1-30 | 31-60 | 61-90 | 90+ | Total |
|---|---|---|---|---|---|---|
| ABC Supply | $5,000 | $2,000 | $0 | $0 | $0 | $7,000 |
| XYZ Services | $3,000 | $0 | $1,500 | $0 | $0 | $4,500 |
| 123 Corp | $0 | $0 | $0 | $500 | $200 | $700 |
| Total | $8,000 | $2,000 | $1,500 | $500 | $200 | $12,200 |
Detail View
| Vendor | Invoice # | Date | Due Date | Amount | Age |
|---|---|---|---|---|---|
| ABC Supply | INV-1001 | 12/15 | 01/14 | $5,000 | Current |
| ABC Supply | INV-0998 | 11/20 | 12/20 | $2,000 | 25 days |
| XYZ Services | INV-5567 | 01/02 | 02/01 | $3,000 | Current |
| XYZ Services | INV-5432 | 11/01 | 12/01 | $1,500 | 45 days |
Uses of AP Aging
Cash Flow Management
See upcoming payment obligations: - Current bucket = due soon - Plan cash needs by week/month - Identify when large payments hit
Payment Prioritization
Decide what to pay first: - Past-due vendors threatening action - Vendors offering early payment discounts - Critical suppliers to maintain relationship - Vendors with late fee penalties
Vendor Relationship Management
Monitor payment history: - Consistently late with certain vendors? - Disputes causing delayed payments? - Vendors on payment plans?
Month-End Reconciliation
Verify AP balance accuracy: - Aging total should match GL balance - Investigate old items - Identify unrecorded liabilities
Audit Support
Provide evidence for auditors: - Prove AP balance is valid - Show payment patterns - Support accrual calculations
Aging Date Basis
Aging can be calculated from different dates:
| Basis | Counts From | Best For |
|---|---|---|
| Invoice date | Date invoice was issued | Standard view |
| Due date | When payment was due | Cash flow planning |
| Entry date | When entered in system | Process monitoring |
Most common: Due date basis (shows what’s actually past due)
Reading the Report
Healthy AP Aging
Current: 70%+ of total 1-30: 20% or less 31-60: 5% or less 61-90: Minimal 90+: Nearly zero
Warning Signs
| Pattern | May Indicate |
|---|---|
| High 90+ balances | Cash flow problems, disputes |
| Same vendor always past due | Relationship issue, dispute |
| Growing past-due totals | Worsening cash position |
| Credits sitting unused | Process gap |
Running AP Aging
Timing
- Weekly: For cash flow management
- Month-end: For reconciliation
- On-demand: When planning payments
Parameters
Most systems let you set: - As-of date - Aging date basis - Vendor filters - Minimum amounts - Summary vs detail
Tips
- Run as of period-end for reconciliation
- Use consistent date basis for comparisons
- Filter out credits for true payables view
- Sort by amount to focus on largest items
Common Issues
Aging Doesn’t Match GL
| Cause | Resolution |
|---|---|
| Timing difference | Run both as of same date |
| Manual journal entries | Identify and reconcile |
| Unposted invoices | Post or remove from aging |
| Wrong report parameters | Verify settings match GL accounts |
Old Items Won’t Clear
| Cause | Resolution |
|---|---|
| Disputed invoice | Resolve dispute or write off |
| Missing credit memo | Request from vendor |
| Payment not applied | Apply payment properly |
| Duplicate entry | Void duplicate |
Negative Aging (Credits)
Credits appear as negative amounts: - Prepayments - Vendor credit memos - Overpayments
Action: Apply to future invoices or request refund.
AP Aging vs AR Aging
| Aspect | AP Aging | AR Aging |
|---|---|---|
| Shows | What you owe | What’s owed to you |
| Owners | Accounts Payable | Accounts Receivable |
| Goal | Manage cash outflow | Collect cash inflow |
| Past-due risk | Late fees, damaged relationships | Bad debt |
KPIs from AP Aging
Days Payable Outstanding (DPO)
DPO = (Average AP Balance ÷ Total Purchases) × 365
Higher DPO = paying slower (better for cash flow, potentially worse for relationships)
Past-Due Percentage
Past-Due % = Past-Due Total ÷ Total AP
Target: Under 10-15% past due
Average Days Past Due
Weighted average of how late past-due items are.
Related Terms
- Net 30 - Common payment terms
- Accrued Expenses - Expenses not yet billed
- AP Reconciliation - Matching aging to GL
Want to see invoice status before they even enter your accounting system? See how BillerPlus tracks invoices from submission to approval →