Aging of accounts is a technique used to classify accounts by their billing or due dates. There are three main types: 1) aging of receivable accounts which breaks down how long invoices have been outstanding, 2) aging of payable accounts which sorts accounts payable by due date to help manage cash flow, and 3) aging of inventory which considers holding costs if inventory is kept too long.

1. Aging of accounts is the technique to classify accounts according to billing or due date. In
this classification, we get the idea to whom, we have to get first and to whom, we have
to pay first. There are main three types of Aging of Accounts
1st Aging of Receivable Accounts
In aging of receivable accounts, we fix the time to collect money from our different
customers. If our customers remain uncollected, it may be bad debt. That is the reason,
company makes aging schedule for accounts of debtors. An aging schedule of accounts
receivable may break down receivables from 1-30 days, 31-60 days, 61-90 days, and
over 90 days.
An Account Receivables Aging Report or schedule is used by a business to show how long
an invoice for payment has been outstanding. This aging of receivable accounts is also
helpful to estimate net bad debts.
2nd Aging of Payable Accounts
Aging of payable accounts is simple a sorting of a company's accounts payable by due
date. Accounts Payable aging report is useful to the management to evaluate that which
of there payments are going to due at which date in this way this helps the management
to manage the amount requires to pay when they are due to pay.
3rd Aging of Inventory
With regard to inventory, if it is held too long, obsolescence, spoilage, and technological
problems may result.
Rehan’s Defination
Aging of accounts is a technicq to classify the billing or due due to this classification we
get an idea to whom we have to get first and to home we have to pay first there are three
types of aging accounts 1- Aging for A/P 2- Aging for A/R 3- Aging for Inventory