An aged analysis (or ageing report) splits the total owed by debtors, or owed to creditors, into bands by how long each amount has been outstanding - current, 30 days, 60 days, 90+ days. It turns one total balance into a picture of how collectible or how overdue it is.
What it means
A debtors aged analysis flags accounts slipping into the 90+ day band as collection risks; a creditors aged analysis flags suppliers a business is falling behind on. The same banding technique applies to any balance that accumulates over time and needs monitoring for age, not just total.
Where it fits in
Payroll does not use ageing in the same way, since wages are paid on a fixed cycle rather than left outstanding, but the technique is the same one used to monitor any recurring statutory liability that falls overdue.
Key rules
- Splits a debtor or creditor total into time bands, usually 30-day periods.
- Highlights collection risk on debtors and overdue exposure on creditors.
- Reviewed regularly, not just at period end.
- The same banding logic applies to any balance accumulating over time.
