How to prepare an accounts payable aging report

What is an AP aging report?

An accounts payable aging report is a document that lists your company’s unpaid and past-due invoices. It totals the list of invoices you haven’t yet paid and organizes them first by vendor, then by days overdue.

An AP aging report helps you understand, at a glance, how well you’ve been keeping up with vendor payments. Nearly all accounting systems or ERP software can generate an AP aging report. They’ll usually group your payables into 30-day increments:

• Current: Bills that are not yet due
• 1–30 days: Bills that are 1-30 days overdue
• 31–60 days: Bill that are 31-60 days overdue
• 61–90 days: Bills that are 61-90 days overdue
• 90+ days: Bills that are more than 90 days overdue

AP aging reports can help you plan cash outlays more accurately and prioritize payments to specific vendors if you don’t have enough cash on hand to cover your full AP balance. For those reasons, it’s among the most useful accounts payable reports you can run.

Components of an AP aging report

As with most financial reports, your AP aging report can be laid out however you find most useful. Even still, most AP aging reports look something like this:

The first column will list the names of any vendors or suppliers that have sent you a bill. For each vendor, outstanding invoices will be categorized by the number of days they’ve been outstanding, summed and entered in the columns to the right. This layout helps you:

1. See what you owe to specific vendors
2. Forecast your upcoming cash needs
3. Understand the makeup of your AP balance

It’s important to note that an AP aging report doesn’t explicitly show your payment terms with each vendor. You can clearly see when bills are overdue but not when late payment fees or interest will be assessed.

How to read an AP aging report

When reading an AP aging report, first look at the total amounts in each column. What do you notice? If you have amounts in any other columns than “Current,” you have bills that are past due.

Next, look at each row to better understand how you manage payments to each vendor. You’ll see which vendors are paid on time and which have been less of a priority for you.

How to prepare an AP aging report

Creating an AP aging report from scratch can be cumbersome and time-consuming compared to generating one in your ERP or AP automation software. Here's how to prepare an AP agent report:

1. Collect invoices. Collect all your invoices, bills, and credit memos from your vendors and suppliers. This ensures that the data you’re using to build your report is complete. The report won't be accurate if you’re missing even one or two invoices.
2. Categorize by vendor. Once you have all your bills, organize them by vendor.
3. Subcategorize by age. Organize your bills by due date within each vendor category.
4. Place payables in buckets. Within each vendor category, place those bills in the aging buckets you’re using (e.g., 1–30 days, 31–60 days, etc.). Total the amount in each bucket. You can begin to organize this information in a table like we showed above.
5. Total each category and subcategory. Total each row (to show how much you owe to each vendor) and each column (to show how much you owe within each aging bucket), then get a combined total of outstanding invoices.
6. Match to balance sheet. The total invoice amounts should match your accounts payable balance. If it’s not, dig into the details to find missing invoices or to fix errors.

If you had to do this manually each time you wanted to see your AP aging report, you’d wind up wasting a lot of time. Small, medium, and large businesses alike will want to rely on their financial software to generate an AP aging report instantly and without errors.

The process of creating an AP aging report with the help of software is much simpler:

• You’ll first enter your invoices into the software. If you get paper invoices, you can type the information into the system manually, or you can use optical character recognition (OCR) technology to automate invoice capture.
• Once invoices are entered into the system and linked to the correct vendor accounts, your software can generate an AP aging report for any date you choose.

When and how to use AP aging reports

Once you generate your report, you need to know how to use it. But first things first: What’s your goal for the report? To reduce late payment fees? To improve vendor relationships? To know how much cash you’ll need to get current on your past-due vendor invoices? Know what you want before trying to interpret what you’re seeing.

If your goal is to reduce late payment fees, for example, you’ll first need to know when late payment fees are assessed. But as noted above, the report only shows when payments are overdue—not when late fees are assessed. You might need to dig into your records to find those details and use them in tandem with your aging report.

Another great way to use aging reports is to look at how your report trends over time. If you run the report once a month for an entire year, look at all 12 reports at once. How have your outstanding invoices changed? Did you begin paying your bills more timely as the year went on? If so, did you see a drop in late payment fees or an improvement in vendor relationships?

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AP aging report vs. AR aging report

Your AP aging report and AR aging report are almost exact opposites: Your AP aging report categorizes bills you owe to vendors, and your AR aging report categorizes amounts you’re still owed from customers. Here’s an at-a-glance breakdown of the differences:

Benefits of AP aging reports

AP aging reports can help you:

• Pay invoices on time
• Take advantage of early payment discounts
• Prioritize payments for certain invoices or vendors
• Triage payment of overdue bills when cash reserves are tight
• Better understand your cash flow needs
• Address cash flow problems
• Improve vendor relationships
• Reduce late payment fees and interest charges
• Reveal inefficient AP processes
• Make better strategic decisions
• Prevent supply chain disruptions due to unpaid invoices
• Forecast accounts payable

Common challenges and best practices for AP aging reports

One common misconception is that the AP aging report is only helpful if you have past-due invoices. This isn’t true—it can also highlight how much you owe to certain vendors at any given time. This can be helpful if you need to make additional orders or want to change suppliers.

To get the most out of your AP aging report, here are a few best practices.

• Input invoices immediately: This ensures you can run your AP aging report in real time and get an accurate picture of your outstanding balances
• Verify invoice date: Verifying the invoice date is crucial for your AP aging report. Make sure the invoice date reflects what’s on the invoice, not the date you received it or the date you made the entry
• Use technology: Use accounts payable OCR technology to scan and read paper documents to improve accuracy and efficiency
• Automate your report: Automatically run your report every month, at minimum, then take time to review it
• Look at trends: Don’t just look at the current report; look at how your AP aging reports are trending over time
• Investigate: If something seems off, dig deeper to see what’s going on

How Ramp Bill Pay simplifies AP tracking

Ramp Bill Pay is autonomous AP software that turns manual tasks into touchless operations. Four AI agents manage invoice categorization, flag fraud pre-payment, create approval records, and execute vendor payments via cards—taking your team out of repetitive work. The platform's OCR achieves up to 99% accuracy on data capture and processes invoices 2.4x faster than legacy systems¹, while also giving you real-time visibility.

Ramp Bill Pay works as standalone AP software, or connects with Ramp's corporate cards, expense tools, and procurement platform for complete spend control. Up to 95% of businesses even see stronger oversight after adopting Ramp².

• Real-time invoice tracking: Monitor every invoice from receipt through payment
• Real-time ERP sync: Connect your vendor master data bidirectionally with 10 ERPs such as NetSuite, QuickBooks, Xero, Sage Intacct, and more for audit-ready books
• Intelligent invoice capture: Extracts data across every line item with 99% OCR accuracy
• Auto-coding agent: Analyzes historical coding patterns and invoice details like product IDs, descriptions, and shipping addresses to map expenses to the correct GL codes instantly
• GL coding: Map transactions to the correct accounts with AI-assisted recommendations
• Reconciliation: Close books faster with automatic transaction matching
• Automated PO matching: Verifies invoices against purchase orders with 2-way and 3-way matching to catch overbilling before payment
• Approval orchestration: Reduces clicks, improves visibility, and accelerates processing across reviewers
• Real-time invoice tracking: Monitor every invoice from receipt through payment
• Payment methods: Pay vendors via ACH, corporate card, check, or wire transfer
• Batch payments: Process multiple vendor payments in a single batch
• Vendor Portal: Let vendors securely update payment details, view payment status, and communicate with your AP team
• Custom approval workflows: Build multi-level approval chains with role-based routing tailored to your org structure
• Fraud prevention agent: Flags suspicious activity before payments go out
• Approval agent: Generates comprehensive summaries with vendor history, contract details, PO matching, and pricing comparisons
• Recurring bills: Automate regular payments with recurring bill templates
• Roles and permissions: Enforce separation of duties with granular user controls
• Vendor onboarding: Collect W-9s, match TINs, and track 1099 data directly in the platform

What sets Ramp Bill Pay apart

Ramp Bill Pay shows what modern AP automation delivers—precision, autonomous processing, touchless workflows, and speed. With 2,100+ verified reviews on G2 averaging 4.8 stars, finance teams describe it as one of the most intuitive AP platforms available.

Ramp Bill Pay functions as complete AP software on its own, but teams looking to track bills with card transactions, expenses, and procurement can use Ramp's integrated platform that unifies everything. Get started with Ramp's free tier handling essential AP automation, or access Ramp Plus for $15 per user monthly to unlock advanced capabilities.

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1. Based on Ramp’s customer survey collected in May’25

2. Based on Ramp's customer survey collected in May’25