How to Use the Xero Aged Receivables Report to Recover Overdue Invoices
There is a report sitting inside your Xero account right now that could be worth thousands of dollars to your business. It is called the Aged Receivables report, and if you are not reviewing it regularly, you are almost certainly leaving money on the table.
This report shows you exactly who owes you money, how much they owe, and critically, how long each invoice has been overdue. It is your single most important tool for managing accounts receivable and recovering outstanding payments. Here is how to use it effectively.
What Is the Aged Receivables Report?
The Aged Receivables report (sometimes called the Aged Debtors report) groups all outstanding customer invoices by how long they have been unpaid. Xero breaks these into ageing buckets:
| Ageing Bucket | What It Means | Risk Level |
|---|---|---|
| Current | Not yet due | Low |
| 1-30 days overdue | Recently past due | Medium |
| 31-60 days overdue | Significantly late | High |
| 61-90 days overdue | Serious concern | Very High |
| 90+ days overdue | At risk of becoming bad debt | Critical |
Research consistently shows that the probability of collecting a debt drops dramatically with time. An invoice that is 90 days overdue has roughly a 70-75% chance of being collected, compared to near-certainty for invoices under 30 days. By 12 months, the probability can fall below 50%.
How to Access the Report in Xero
Step 1: Navigate to the Report
Go to Accounting → Reports → Aged Receivables. You can also search for it using the search bar at the top of Xero.
Step 2: Set Your Date
The report defaults to today's date, which is usually what you want. However, you can change the date to see what your receivables looked like at any point in time. This is useful for tracking whether your collections are improving month over month.
Step 3: Choose Summary or Detail
Xero offers two versions:
- Summary: Shows total owed per customer across ageing buckets. Best for a quick overview.
- Detail: Shows every individual invoice. Use this when you need to chase specific invoices.
Step 4: Review and Filter
You can filter by contact group if you want to focus on specific customer segments. Export to CSV or PDF to share with your team or BAS agent.
How to Read the Report Strategically
Looking at the numbers is one thing. Knowing what to do with them is another. Here is a framework for turning the Aged Receivables report into action:
Look at the Distribution First
A healthy receivables profile has the vast majority of outstanding invoices in the Current and 1-30 days columns. If a significant portion sits in 60+ days, you have a systemic collection problem, not just a few slow payers.
Benchmark: For most Australian SMEs, aim to have less than 10% of total receivables in the 60+ day bucket. If you are above 20%, your collection process needs urgent attention.
Identify Your Biggest Exposures
Sort by total amount owed. Your top five debtors probably represent the majority of your outstanding receivables. These are the relationships that need the most attention. Ask yourself:
- Is this a one-off delay or a pattern?
- Is the total exposure growing month over month?
- Should I adjust credit limits for this customer?
- Is the outstanding amount material enough to impact my cash flow?
Spot the Repeat Offenders
Some customers are consistently late. The Aged Receivables report makes this visible. If the same names keep appearing in the 30+ day columns every time you run the report, it is time for a different approach. Options include:
- Requiring deposits or upfront payment
- Shortening their payment terms
- Implementing automated payment reminders (this is where PaidMate excels)
- Having a direct conversation about payment expectations
Building a Weekly Collection Routine
The most effective businesses review their Aged Receivables report weekly. Here is a simple routine you can implement today:
Monday Morning (15 Minutes)
- Run the Summary report to see the overall picture
- Check the 60+ day column for any new additions since last week
- Note the total receivables figure and compare it to last week
Monday Afternoon (30 Minutes)
- Switch to the Detail view for the 30+ day buckets
- Prioritise by amount: Contact your largest overdue accounts first
- Send reminders for anything in the 1-30 day bucket
- Make phone calls for anything in the 60+ day bucket
End of Month (1 Hour)
- Compare this month's report to last month
- Calculate your debtor days (Total Receivables / Average Daily Revenue)
- Identify trends: Are things improving or getting worse?
- Review any invoices approaching 90 days and escalate
Pro tip: Set a calendar reminder every Monday at 9 AM to check your Aged Receivables. The businesses that collect fastest are the ones that check most consistently. Or better yet, let PaidMate automate the reminders so your team can focus on building relationships instead of chasing payments.
Turning Insights into Action: The Escalation Ladder
Different ageing buckets require different responses. Here is a proven escalation framework used by successful Australian businesses:
Current (Not Yet Due)
No action needed, but this is the perfect time for a pre-due reminder. A friendly message 3-5 days before the due date significantly improves on-time payment rates. PaidMate sends these automatically.
1-30 Days Overdue
Send a polite payment reminder. Keep the tone friendly and assume it was an oversight. Most late payments at this stage are simply forgotten, not intentional. A well-crafted reminder recovers the majority of these invoices.
31-60 Days Overdue
Escalate to a phone call or a more direct written reminder. Ask if there is a dispute or issue with the invoice. Sometimes invoices are delayed because of a legitimate query that nobody raised. This is also the time to offer a payment plan if the customer is experiencing cash flow difficulties.
61-90 Days Overdue
Formal written demand. Reference the original invoice, payment terms, and any previous reminders. Mention that you may need to consider further action if payment is not received. This does not mean threatening legal action immediately, but making the seriousness clear.
90+ Days Overdue
Decision time. Consider whether to:
- Engage a debt collection agency (they typically charge 10-25% of the recovered amount)
- Pursue through the relevant small claims tribunal (NCAT in NSW, VCAT in VIC, QCAT in QLD)
- Write off as a bad debt (claim the GST back through your next BAS)
- Negotiate a final settlement at a reduced amount
Key Metrics to Track from Your Report
Beyond the raw numbers, calculate these metrics monthly to measure your collection effectiveness:
- Debtor Days (DSO): (Accounts Receivable / Total Credit Sales) x Number of Days. Target: under 30 days for most industries.
- Collection Effectiveness Index (CEI): Measures how much of your receivables you actually collect. Target: above 80%.
- Bad Debt Ratio: Bad debts written off / Total credit sales. Target: under 2%.
- Ageing Concentration: Percentage of receivables in 60+ days. Target: under 10%.
How PaidMate Supercharges Your Aged Receivables Management
Reviewing the report is essential, but acting on it consistently is where most businesses fall short. Life gets busy, follow-ups slip, and invoices drift from 30 days to 60 to 90 before anyone notices.
PaidMate connects directly to your Xero account and automates the entire escalation ladder. It sends AI-crafted payment reminders at each stage, escalating the tone appropriately while always maintaining professionalism and protecting your client relationships.
The result? Your Aged Receivables report starts looking healthier within weeks. More invoices stay in the Current column, fewer drift past 30 days, and the 90+ bucket shrinks dramatically.
Because PaidMate is AI-powered, each reminder is personalised to the customer and the context. It is not a generic template blast. It is a thoughtful, relationship-aware nudge that gets results without burning bridges.
Stop Staring at Overdue Invoices. Start Collecting Them.
PaidMate automates your accounts receivable process with AI-powered reminders that actually get invoices paid. Works seamlessly with Xero.
Try PaidMate TodayFinal Thoughts
The Xero Aged Receivables report is not just a number on a screen. It is a map of your business health. Every invoice sitting in the 60+ day column represents money that should be in your bank account, funding your operations, paying your staff, and growing your business.
Make reviewing this report a weekly habit. Build a systematic escalation process. And consider automating the follow-up work so nothing falls through the cracks. Your cash flow will thank you.