Finance
Accounts receivable
Also known as AR
Accounts receivable is money owed to a business by customers for goods or services already delivered but not yet paid for. Receivables are recorded as an asset under accrual accounting and represent revenue recognised ahead of cash collection.
In plain terms: Work you have done and invoiced but not yet been paid for.
Why it matters
The gap between revenue and cash. A growing receivables balance alongside growing revenue means you are financing your customers, which is the most common way a growing small business runs out of money.
Read the full guideBookkeeping