An aging report lists every open invoice (AR) or bill (AP) by customer or vendor and sorts the balances into age buckets based on invoice or due date. In construction, retainage is aged in its own bucket, because it isn’t due until release, and disputed amounts often get their own column.
An aging as of a past date shows exactly what was open then, using the dates payments were applied.
Why it matters
AR aging drives collections and cash forecasts; lenders use it to set borrowing bases (usually excluding retainage and over-90 balances). AP aging drives payment runs. Each should equal its control account.
Worked example
A customer has $20,000 past due over 30 days, $15,000 of retainage and $5,000 disputed. The aging shows them in three different columns, and a 1.5% monthly finance charge applies to the $20,000 only: $300 (illustrative).
Common mistakes
- Mixing retainage with current receivables.
- Rerunning an old aging with today’s payment data.
How os.construction handles it
In the accounting preview, AP aging runs as of any date from the AP subledger, with retainage kept separate. AR aging currently comes from the general ledger and is not certified. See Financial reports.