Running the business Receivables

Ageing analysis explained

An ageing analysis groups unpaid bills by how old they are, usually in 30-day buckets. It tells you not just how much customers owe, but how stale that money is, which is what decides how likely you are to collect it.

Updated 2026-11-053 min read

Who this is for

Distributors and wholesalers
Owners giving credit to dealers
Accounts and collection staff
Salespeople who collect
Businesses with supplier credit

On this page 11

What the report looks like

Each row is a party; each column is an age bucket. The age is counted either from the bill date or from the due date. Counting from the due date is more useful for collection, because a 45-day-old bill on 60-day terms is not yet late.

Party	Not due	1–30 days	31–60	61–90	90+	Total
Jain Traders	₹1,20,000	₹40,000	–	–	–	₹1,60,000
Shree Hardware	₹35,000	₹60,000	₹55,000	–	–	₹1,50,000
Rao & Sons	–	–	₹30,000	₹45,000	₹82,000	₹1,57,000
Total	₹1,55,000	₹1,00,000	₹85,000	₹45,000	₹82,000	₹4,67,000

How to read it

Totals look similar, risk does not. All three parties owe about ₹1,50,000. Jain Traders is healthy, Shree Hardware needs a call, and Rao & Sons has ₹82,000 over 90 days past due, which needs the owner's attention now.
Watch the share, not just the amount. Here ₹2,12,000 of ₹4,67,000, about 45%, is more than 30 days overdue. If that share grows month after month, your collection process is slipping even if sales are rising.
Look for "on account" receipts. If receipts are not adjusted against bills, the report shows old bills as unpaid when the party has actually paid. Clean these up before chasing anyone.

What to do with each bucket

Bucket	Action
Not due	Courtesy reminder a few days before the due date.
1–30 days overdue	Statement and reminder; phone call at about 7 days.
31–60 days	Visit by salesperson; new orders need approval.
61–90 days	Supply on hold; owner-to-owner call; agree a written payment plan.
90+ days	Formal notice; discuss with your CA whether to provide for or write off the debt; legal options for large amounts.

For the full sequence of messages, see our payment reminder templates.

Payables ageing: the other side

The same report for suppliers shows what you owe and how late you are. It helps you plan payments and protect your standing with key suppliers. It is also how you check purchases from micro and small enterprises, which have a legal payment time limit; see the MSME 45-day payment rule.

Getting a reliable ageing report

Maintain bill-wise details for all customer and supplier ledgers in your accounting software. In TallyPrime this is the bill-wise option on the ledger; see Tally bill-wise details explained.
Enter the credit period on each sales bill so the due date is correct.
Adjust every receipt against specific bills ("Agst Ref"), not "On Account".
Post credit notes for returns and scheme discounts promptly, against the right bill.
Run the report weekly on the same day.

Turning the report into a weekly list

The report is only useful if it produces actions. A practical way:

Filter parties with anything in the 31-day-plus buckets.
Sort by the amount in the oldest bucket, not the total.
Assign each party to a person: salesperson, accounts or owner, depending on the bucket.
Note the next action and date next to each name.
Next week, start by checking last week's list before running the new one.

Over a few months, compare the bucket totals at each month end. A healthy business sees money flow out of the older buckets, not pile up in them. If the 90+ column grows every month, the issue is not individual customers but your credit process; see credit control policy for distributors.

It also helps to look at ageing by salesperson or area. One territory with an unusually heavy 61–90 bucket usually points to a specific problem: a lenient salesperson, a struggling market or a big dealer in trouble.

Ageing on your phone with Cashflow OS

Cashflow OS syncs bill-wise outstanding from TallyPrime and shows receivables and payables with ageing on your phone and the web. You can open a party from the list, see which bills are in which bucket, and send the statement on WhatsApp. Reports export to Excel or PDF for your weekly review. Details are on the outstanding receivables page.

Avoid these

Common mistakes

MistakePosting receipts 'On Account' instead of against bills
Do this instead
Adjust every receipt against specific bills, or old bills show as unpaid and you chase customers who have already paid.
MistakeLooking only at total outstanding per party
Do this instead
Sort by the amount in the oldest bucket; two parties with equal totals can carry very different risk.
MistakeLeaving the credit period blank on sales bills
Do this instead
Enter the credit days on each bill so the due date, and the overdue bucket, is correct.
MistakeRunning the report but not assigning any action
Do this instead
Turn it into a weekly list: each overdue party gets a person, a next step and a date, and check last week's list first.

Keep handy

Checklist

Ageing analysis explained — 8 checks. Tick them as you go.

Bill-wise details switched on for all customer and supplier ledgers
Credit period entered on each sales bill
Receipts adjusted against specific bills, not on account
Credit notes for returns and schemes posted against the right bill
Buckets chosen to suit your credit terms (15 or 30 days)
Report run weekly on the same day
Each 31-day-plus party assigned to a person with a next action
Month-end bucket totals compared to see the trend

In Cashflow OS

How Cashflow OS helps

Cashflow OS puts your TallyPrime books on every phone in the team. Where it fits this topic:

Receivables and payables ageing on your phone

Bill-wise outstanding is synced from Tally and shown with ageing on phone and web, so you can see which bills sit in which bucket.

See Outstanding receivables

Receivables and payables ageing on your phone

Statements to the party on WhatsApp

Open a party from the list and share their statement as a PDF in Tally's format, or a simple Hindi page, with a payment reminder.

See Party ledger statements

Questions people ask

Should ageing be calculated from bill date or due date?

Bill date shows how long money has been out; due date shows how late the customer is. For collection work, due date is more useful. Many owners look at both.

How often should I run an ageing analysis?

Weekly for collection follow-up, and monthly for a summary review of trends.

When should an old debt be written off?

That depends on your collection efforts and the accounting and tax treatment, so decide it with your CA. Keep records of reminders and notices sent.

What buckets should I use?

30-day buckets (0–30, 31–60, 61–90, 90+) suit most traders. If your credit period is short, such as 15 days, use 15-day buckets for the early ages.

What is payables ageing?

The same report for suppliers. It shows what you owe and how late you are, which helps plan payments and check dues to micro and small suppliers.

Why does a customer who has paid still show old bills?

Usually the receipt was posted on account instead of against the bills. Adjust it against the right bills and the ageing will correct itself.

Can I see ageing by salesperson or area?

Yes, if parties are grouped by salesperson or area. A territory with a heavy 61–90 day bucket often points to one specific problem worth looking into.

Does ageing show in Tally?

Yes. With bill-wise details maintained, TallyPrime's outstanding reports can show bills by age. Without bill-wise details, a reliable ageing is not possible.

This page is general information for Indian businesses, not tax, legal or financial advice. Rules and rates change — check the official portals or your CA before acting.