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Background: Maintaining independence in instrumental activities of daily living (IADL) is crucial for older adults. This study explored the association between cognitive and functional performance in general and in single IADL domains. Also, risk factors for developing IADL impairment were assessed. Methods: Here, 3,215 patients aged 75–98 years were included. Data were collected during home visits. Results: Cognitive functioning was associated with IADL both cross-sectionally and longitudinally. Regarding the single IADL domains cross-sectionally, executive functioning was especially associated with shopping, while episodic memory was associated with responsibility for own medication. Conclusion: Reduced performance in neuropsychological tests is associated with a greater risk of current and subsequent functional impairment.