What are aged debtors in simple terms?

Aged debtors are customers who owe your business money for goods or services provided, categorised by how long their invoices have been outstanding. Typically grouped into 30, 60, and 90+ day periods to help track overdue payments.

How do I calculate my aged debtors report?

List all unpaid invoices, calculate days outstanding from invoice date to current date, then group into aging categories (0-30 days, 31-60 days, 61-90 days, 90+ days). Most accounting software like FreeAgent can generate this automatically.

What is a good aged debtors ratio for small businesses?

Generally, 80% of debtors should be in the 0-30 day category, 15% in 31-60 days, and only 5% over 60 days. If more than 20% of your debtors are over 60 days old, you may need to improve your debt collection processes.

How can I reduce my aged debtors effectively?

Implement clear payment terms, send invoices promptly, follow up on overdue accounts regularly, offer early payment discounts, consider direct debit arrangements, and maintain good customer relationships whilst being firm about payment expectations.

Should I write off old aged debtors for tax purposes?

Bad debts can be written off for tax relief if they're genuinely irrecoverable and you've taken reasonable steps to collect them. Consult with your accountant as this affects your corporation tax or self-assessment position.

How does aged debtors affect my cash flow?

High aged debtors directly impact cash flow by tying up working capital in unpaid invoices. This can force businesses to use overdrafts or loans to cover expenses, creating unnecessary interest costs and financial strain.

What accounting software helps track aged debtors?

FreeAgent, Xero, and QuickBooks all provide aged debtors reports with automatic calculation and aging categories. These tools can also send payment reminders and track collection activities to help manage your debtor book effectively.

Can GoForma help with aged debtors management?

Yes, our small business accounting packages include aged debtors analysis, cash flow advice, and support with debt collection strategies. Your dedicated accountant can help you interpret reports and implement effective collection processes.

What are Aged Debtors?

Aged debtors are outstanding customer invoices categorised by how long they have remained unpaid, typically grouped into 30, 60, 90+ day periods to help UK businesses track overdue payments and manage cash flow effectively. Understanding what are aged debtors enables companies to identify problem accounts, improve debt collection processes, and maintain healthy working capital for sustainable business operations.

Published Apr 13, 2021

Last updated Jan 29, 2026

5 min read

Written by Jordan MaceyAAT

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<p>An aged debtors report shows a list of customers (debtors) who owe your business money, as well as the amount owed at any given time.</p>

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What are Aged Debtors?

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