In an aging report, which category should ideally contain the lowest percentage of accounts receivable?

In an aging report, the category that should ideally contain the lowest percentage of accounts receivable is the one representing accounts greater than 120 days. This is because accounts that are older than 120 days are considered long overdue and indicate that the practice has had difficulty collecting payment for those accounts.

In a healthy accounts receivable management system, the goal is to collect payments in a timely manner; thus, the older the account gets, the lower the percentage of total receivables it should represent. A high percentage of accounts in the greater than 120 days category signals potential problems with the billing process or customer payment practices, and it could reflect negatively on the financial health of the practice.

In contrast, categories like 1-30 days, 31-60 days, and 61-90 days should have higher percentages as they represent newer accounts, indicating that payments are being collected in a timely manner. Ideally, practices aim to keep most of their accounts in the younger aging categories, as these are less likely to result in bad debt and signify effective management of receivables.