Aging groups what you are owed by how long it has been outstanding — usually current, 30, 60 and 90-plus days.
The same grouping applies to what you owe, where it tells you what is about to become a problem with a supplier.
Why age matters more than amount
Because the age of an invoice predicts collection far better than its size.
A $10,000 invoice at 20 days is a normal receivable. The same $10,000 at 120 days is a different asset entirely, and it is worth materially less than face value — see collectible receivables.
Reading the shape
Most of it current — healthy, and the collection process is working.
A bulge at 30 to 60 — invoices are going out and nobody is chasing at seven days.
A long tail past 90 — old invoices are accumulating rather than resolving, and the tail is quietly inflating what you think you are owed.
One large invoice dominating a bucket — that is a single conversation rather than a process problem, and it is worth having today.
What to do with it
Work oldest first. The instinct is to chase the largest, and the oldest are the ones about to become uncollectible.
Anything past 90 days needs a decision rather than another reminder: chase it properly, settle it, or write it off. See bad debt.
What it needs to be accurate
Invoices with real due dates, and payments recorded against them. An aging report built on invoices with no terms is a list sorted by when you happened to raise them.