Most business owners know they have overdue invoices. The aged receivables report in Xero tells you exactly how overdue they are - and once you know that, you have a decision to make about each one.
This article explains how to read the report, what the numbers are really telling you, and how to turn it into a practical weekly process for staying on top of what you’re owed.
How to find it in Xero
Go to Accounting > Reports > Aged Receivables. Xero will show you a list of customers with outstanding balances, grouped into time buckets based on how long each invoice has been unpaid.
The default view shows:
| Column | What it means |
|---|---|
| Current | Invoices not yet past their due date |
| 1-30 days | Overdue by up to a month |
| 31-60 days | Overdue by one to two months |
| 61-90 days | Overdue by two to three months |
| 90+ days | Overdue by more than three months |
You can run the report as at today, or set a specific date to see what your receivables looked like at a point in the past - useful for spotting patterns over time.
One thing to check before you do anything else
The figures in the aged receivables report are gross amounts - they include VAT.
That matters when you’re using the report to think about cash flow. If a customer owes you £1,200, and £200 of that is VAT, the money that actually ends up in your business is £1,000. The other £200 will eventually go to HMRC.
It’s a small thing, but worth keeping in mind when you’re looking at the total column and thinking about how much breathing room you actually have.
Why the age of an invoice matters more than most people realise
The older an overdue invoice gets, the less likely you are to collect it. This isn’t a vague warning - the data is fairly consistent across industries.
According to research from the Commercial Law League of America, collection probability drops dramatically as invoices age. The breakdown by bucket, documented by Crestmont Capital using data across thousands of B2B businesses, looks roughly like this:
| Age | Approximate chance of collecting |
|---|---|
| 1-30 days overdue | ~90% |
| 31-60 days overdue | ~85% |
| 61-90 days overdue | ~75% |
| 91-120 days overdue | ~55% |
| Over 120 days | ~25% |
By the time an invoice has been outstanding for six months, fewer than one in ten are recovered without legal action or a debt collection agency getting involved.
These are averages - your customers and industry will differ. But the direction of travel is consistent: every week you wait on a 90-day invoice, you are less likely to see that money.
The practical implication is that the 90+ column is always the most urgent place to look first, even if the amounts are smaller than some of the newer invoices.
What to do with each bucket
Running the report is the easy part. Here’s how to act on what it shows.
Current (not yet due)
No action needed yet, but it’s worth scanning for customers who appear here regularly and tend to drift late. If you know from experience that a particular customer never pays on time, a pre-due-date reminder can head the problem off before it starts. We’ve written about when and how to use pre-due-date reminders here.
1-30 days overdue
Send a reminder now if you haven’t already. At this stage the tone should be friendly - most invoices in this bucket are late because of admin, not because anything is seriously wrong. A short, warm email is usually enough. We have five ready-to-use late payment email templates here, from a gentle first nudge through to a more formal escalation notice.
31-60 days overdue
Time to escalate. A second email with a firmer tone, or a phone call alongside it. Keep it professional - you’re not accusing anyone of anything, you’re just making clear that payment is now overdue and you need a date.
61-90 days overdue
A formal follow-up referencing the specific invoice, the amount owed, and how far past due it is. If there’s a significant sum involved, it’s worth a direct call rather than just an email. This is also a good point to check whether there’s a dispute you don’t know about - sometimes invoices sit unpaid because the customer has a question they haven’t raised yet.
90+ days overdue
This is a decision point. You have a few options: a formal demand letter giving a specific deadline, a conversation about a payment plan, or - for the oldest and largest debts - an honest assessment of whether it’s worth pursuing further. Some invoices in this bucket will still be recoverable with the right approach. Others won’t be. Being clear-eyed about which is which saves time and stress.
What the report doesn’t show you
The aged receivables report is a snapshot. It shows you what’s owed and how old it is, but it doesn’t tell you:
- Whether a reminder has already been sent on a given invoice
- Whether there’s a dispute in progress
- What the payment history looks like for that customer
- Which invoices have had a response and which have been completely ignored
That missing context is what makes the report feel incomplete as a working tool. You can see the numbers, but working out what to actually do next often requires digging through your inbox or relying on memory.
Trove connects directly to your Xero account and builds that context automatically - tracking which invoices have been chased, scheduling follow-ups, and keeping a record of any replies or promises to pay. Instead of manually working through the aged receivables list each week, the chasing happens in the background. You can start a free 30-day trial here or book a demo if you’d like to see it first.
How to make this a weekly habit
The aged receivables report is most useful when you check it consistently rather than occasionally. A quick weekly review catches invoices before they drift too far into the older buckets, when recovery becomes harder.
The simplest way to build the habit is to put a recurring calendar reminder in every Friday morning. Set aside ten minutes to run the report, scan for anything that has moved into a new bucket since last week, and send any reminders that are due. Friday works well because it gives customers the weekend to process a payment, and you start the following week with a clear picture of where things stand.
If your invoice volume has grown to the point where ten minutes isn’t enough, that’s usually the signal to automate. Trove runs a free 30-day trial and takes about five minutes to connect to your Xero account.
What’s the actual value at risk in your report?
Knowing that 90-day invoices are harder to collect is one thing. Knowing what that means in pounds for your specific debtor list is another.
We’ve built a simple calculator that lets you put in the totals from each bucket of your aged receivables report and see an estimate of how much is likely to be recoverable - and how much may be at risk. Try the invoice recovery calculator here.
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