All 21 Aging Analysis questions
More in Aging Analysis
What is an aging report (aged trial balance)? What is the difference between AR aging and AP aging? What does the 90+ days bucket typically signify and how is it treated? How do you read an AR aging summary at a glance? What does it mean when receivables are 'current' versus 'past due'? What is a weighted-average days overdue and why is it useful? How is Days Sales Outstanding (DSO) calculated and what does it indicate? What is Days Payable Outstanding (DPO) and how does it relate to aging? What is the cash conversion cycle and how do AR/AP aging feed it? How is aging used to prioritize collections activity?
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Accounts Payable & Receivable › Aging Analysis

How are aging buckets determined—by invoice date or due date?

Beginner

Answer

Aging can be calculated from the invoice date or the due date; due-date aging is more meaningful because it reflects amounts actually past their payment deadline. A report aged by due date with terms applied shows true delinquency, whereas invoice-date aging overstates 'overdue' by ignoring the credit period.
Invoice date 1 June, Net 30 -> due 1 July.
On 15 July: due-date aging = 14 days overdue;
invoice-date aging = 45 days (misleading).
Real-world example Switching the report to due-date aging stops the team from chasing invoices that are still within terms.

Common follow-ups: Why is due-date aging preferred? | How do payment terms factor in?

Credit Control Collections & Bad Debts Aging Analysis
All 21 Aging Analysis questions