Aging bucket
Also known as ageing bucket, aging band, aging buckets
An aging bucket is one of the intervals in the aged debtors report — the band an invoice falls into, depending on how long it has been overdue.
- Typical split
- 0-30, 31-60, 61-90, over 90 days
- Measures
- How old the outstanding balance is
- Used for
- Prioritisation and provisioning
In practice
The aged debtors report is the report. The bucket is the individual column in it. The split usually follows months — everything overdue by less than 30 days, then 31-60, 61-90, and everything past 90 days gathered into one.
The reason for splitting is that money behaves differently in each band. A claim in the first bucket usually pays itself. A claim in the last one almost never does, and that is where provisioning and the decision to hand the case over belong.
Which is why the bucket is not merely a view. It is the threshold a workflow can hang on — when to chase, when to stop deliveries, when the case moves on.
Where it commonly goes wrong
- Measuring the total instead of the distribution. Two companies with the same outstanding balance can carry very different risk if one has everything in the first bucket and the other in the last.
- Counting the intervals from the invoice date. Ageing has to run from the due date. Otherwise long payment terms look like arrears.