Construction Invoice Aging Calculator

Invoice Aging Inputs

Example Data Table

Sample invoices below show typical aging buckets used for construction receivables.

Formula Used

• Gross Before Discount = Invoice Amount + Change Orders
• Subtotal = max(0, Gross Before Discount − Discount)
• Tax Amount = Subtotal × (Tax Rate ÷ 100)
• Total Billed = Subtotal + Tax Amount
• Retention Amount = Total Billed × (Retention Rate ÷ 100)
• Outstanding = max(0, Total Billed − Paid To Date − Retention Amount)
• Days Past Due = As‑Of Date − Due Date (in days)
• Aging Bucket based on Days Past Due: Current, 1–30, 31–60, 61–90, 91–120, 120+
• Late Fee = Outstanding × (Late Fee Rate ÷ 100) × ((max(0, Days Past Due − Grace Days)) ÷ 30)

How to Use This Calculator

1. Enter invoice details, billed amount, and any change orders.
2. Add discount, tax rate, and retention rate if applicable.
3. Enter payments received so far under Paid To Date.
4. Set invoice date, due date, and the As‑Of snapshot date.
5. Optionally add grace days and a monthly late-fee rate.
6. Press Calculate Aging to view results above the form.
7. Use CSV/PDF downloads for sharing and internal reporting.

Professional Article

Use this article to interpret aging results, align billing practices, and reduce receivable risk across active jobs every week.

1) Why aging matters for construction cash flow

Construction billing cycles are long, and small delays stack up fast. Aging converts invoices into an actionable cash view: what is current, what is slipping, and what threatens payroll or vendors. Linking aging to project milestones makes collection efforts predictable.

2) Setting the right as‑of date and cutoff

Use a fixed as‑of date, such as Friday close or month end. Consistent cutoffs keep reports comparable, avoid “moving target” disputes, and help reconcile aging totals to your ledger. When you close periods, match accounting cutoffs to reduce confusion.

3) Using buckets to drive collection priority

Standard buckets are Current, 1–30, 31–60, 61–90, 91–120, and 120+. Treat buckets as action bands: weekly touches for 31–60, twice weekly for 61–90, and escalation for 91+. Structure prevents missed follow‑ups and broken promises.

4) Accounting for retention in progress payments

Retention commonly runs 5%–10% and is released only at defined milestones. Separating retention from the chase balance shows true short‑term exposure. Track release triggers, notice windows, and approvals so retention doesn’t become an unplanned financing cost.

5) Progress billing, change orders, and disputes

Progress billing improves when documentation is clean. Add approved change orders, attach backups, and confirm pay application values match the contract schedule. If an item is disputed, assign ownership and a due date. Aging should reflect collectability, not only time.

6) Late fees and grace periods with contract discipline

Late fees must align with contract language and be applied consistently. A grace period can preserve relationships while setting boundaries. Pro‑rating a monthly rate by days past due keeps estimates realistic. Use fees as leverage, not a surprise penalty.

7) Key metrics: DSO, CEI, and concentration risk

Beyond totals, track Days Sales Outstanding (DSO) and Collection Effectiveness Index (CEI) to measure improvement. Watch concentration risk: one slow payer can distort the portfolio. Summaries by client and project reveal where to tighten terms or documentation.

8) A practical weekly workflow that reduces write‑offs

Run aging weekly, review newly past‑due items, and log the next action for every invoice. Record promised pay dates and required paperwork. Escalate approvals early. A steady cadence, clear ownership, and accurate inputs reduce write‑offs and cash shocks.

FAQs

1) What does “Current” mean in invoice aging?

“Current” means the invoice is not past due as of the selected as‑of date. It may still be unpaid, but it remains within the agreed payment terms and should not be escalated yet.

2) Why is retention excluded from the outstanding amount?

Retention is typically withheld until specific milestones, so it is not collectible in the normal billing cycle. Separating retention helps you focus on the portion you can realistically collect now.

3) How are days past due calculated?

Days past due equals the difference between the as‑of date and the due date. If the result is zero or negative, the invoice is treated as current.

4) Can I use a negative change order value?

Yes. Negative change orders represent credits, back-charges, or scope reductions. They reduce the gross billed amount, which can change tax, retention, and the final outstanding balance.

5) How does the late fee calculation work here?

The calculator applies an optional monthly late-fee rate to the outstanding balance after grace days. The fee is pro‑rated using chargeable days divided by 30, which approximates partial months.

6) What if paid-to-date exceeds the billed amount?

If payments exceed the billed amount, the outstanding balance is floored at zero to avoid negative receivables. Review that case for credits, overpayments, or retention releases posted separately.

7) What’s a good routine for using aging on projects?

Review aging weekly, confirm paperwork status, and set next actions per invoice. Follow up more frequently as invoices move into older buckets, and escalate approval bottlenecks before they become chronic.