What is Payables Aging?
A payables aging report is a schedule that classifies a company’s outstanding supplier invoices by how long they have been unpaid, typically in buckets of current, 1-30 days, 31-60 days, 61-90 days, and over 90 days past due.
How It Works
- Pull the open accounts payable balance from the general ledger.
- Group invoices by supplier and by days past due relative to the invoice date or due date.
- Total each aging bucket to spot concentration of overdue balances.
- Review old balances for disputes, missing approvals, or potential write-backs.
- Use the report to schedule the next payment run and communicate with suppliers.
Saudi Context
Saudi entities subject to ZATCA tax audits must reconcile their payables aging to declared VAT input credits — input tax can only be claimed within the windows allowed by the VAT Implementing Regulations. Overdue payables also affect a company’s working capital ratios reviewed by Saudi banks during credit reviews.
Example
A trading company has SAR 1.2M in payables: SAR 600K current, SAR 350K in 1-30 days, SAR 180K in 31-60 days, and SAR 70K over 90 days. The over-90 bucket triggers a review for disputes and possible legal exposure.