A roofing company can post a profit on the P&L and still miss payroll. The gap is almost always receivables. Every dollar a homeowner, property manager or general contractor owes you is a dollar you already spent on shingles, labor and dumpsters. The accounts receivable aging report shows how much of that money is late, who holds it, and how fast it goes stale.
Reading a $99,600 Aging Report
All figures below are illustrative. Assume your QuickBooks aging report on the last day of the month looks like this:
| Bucket | Open balance | Share of total |
|---|---|---|
| Current (not yet due) | $48,200 | 48% |
| 1 to 30 days past due | $21,600 | 22% |
| 31 to 60 days past due | $14,300 | 14% |
| 61 to 90 days past due | $9,100 | 9% |
| Over 90 days past due | $6,400 | 7% |
| Total open | $99,600 | 100% |
The total is not the number to watch. Look at the right side of the table. Balances more than 60 days past due add up to $15,500, or about 16% of everything owed. Money in that column collects less often and takes more of your time, so treat it as a separate list with a named owner.
Add one more metric: days sales outstanding. If you invoiced $270,000 over the last 90 days, divide the $99,600 balance by $270,000 and multiply by 90. The result is roughly 33 days. When it climbs from 33 to 45, cash is tightening.
What Late Money Costs
Late payment has two costs, and most owners count only the second one.
The carrying cost. Say a $13,200 reroof invoice sits 45 days past due while you cover materials on a line of credit at 12%. That is $13,200 x 12% x 45 / 365, or about $195 of interest on one job. Multiply by every job in the 31 to 90 day buckets and the number is real money.
The write-off cost. If the same job is priced for a 10% net profit, it earns $1,320. Lose the whole $13,200 and you need ten comparable jobs to earn it back. That is the math behind chasing a $13,200 balance as hard as you would chase a new lead.
A Collection Cadence That Works
Collections go wrong when nobody owns them. Put one person in charge and give that person a calendar. A simple cadence:
- Day of completion. Send the invoice before the crew leaves the site. Attach the signed completion form and photos.
- Day 1 past due. Send a short, polite reminder with the invoice and payment link attached.
- Day 10 past due. Call. Ask a direct question: "What is holding up payment, and what date can I count on?" Write the answer in the customer record.
- Day 30 past due. Send a written notice stating the balance, any late fee in your contract, and the date you will take the next step.
- Day 45 past due. Review lien rights and notice deadlines for the job, and bring in an attorney if the balance is large.
The last step is the one that costs people money. Lien and notice deadlines run from specific dates and differ by state, so check them early. Our guide to lien rights and notice deadlines covers the timing questions to bring to your attorney.
Keeping the Books Clean
An aging report is only as good as the entries behind it. Four habits keep it honest:
- Apply every payment to the invoice it pays. Unapplied payments and credits leave invoices looking open when they are not, which inflates your aging and annoys customers.
- Record deposits as deposits. A deposit collected before work starts is a liability, not income and not a reduction of a different job's balance. See customer deposits and unearned revenue.
- Separate retainage. Held retainage is not past due. If it sits in the same bucket as normal invoices, your 90-day column looks worse than it is and real problems get buried. See retainage tracking in QuickBooks Online.
- Review aging weekly, not monthly. Thirty minutes every Monday catches a slipping payer while the job is still fresh in the crew's memory.
Common Mistakes
- Invoicing late. A payer cannot be late on an invoice you have not sent.
- Writing off without a record. Document every attempt and the final decision. Your CPA needs that file for bad debt treatment.
- Starting new work for a slow payer. Set a rule: no new job for a customer, builder or property manager with a balance over 60 days.