Bookkeeping & Reporting

Accounts Receivable

Accounts receivable is the money customers owe a business for goods or services already delivered.

Quick answer

Accounts receivable is the money customers owe a business for goods or services already delivered.

It matters because unpaid invoices affect cash flow even when revenue has already been recorded.

A business that invoices clients after work is completed may carry accounts receivable until payment arrives.

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Plain-English Definition

What Accounts Receivable means

Accounts receivable is the money customers owe a business for goods or services already delivered.

Why it matters It matters because unpaid invoices affect cash flow even when revenue has already been recorded.
Simple example A business that invoices clients after work is completed may carry accounts receivable until payment arrives.
Related Questions

Questions people ask about Accounts Receivable

What does Accounts Receivable mean?

Accounts receivable is the money customers owe a business for goods or services already delivered.

Why does Accounts Receivable matter?

It matters because unpaid invoices affect cash flow even when revenue has already been recorded.

What is a simple example of Accounts Receivable?

A business that invoices clients after work is completed may carry accounts receivable until payment arrives.

When should I ask a CPA about Accounts Receivable?

Ask a CPA when the term changes how your books are kept, how reports are read, or how tax numbers are produced from accounting records.

How is Accounts Receivable different from Accounts Payable?

Accounts Receivable means Accounts receivable is the money customers owe a business for goods or services already delivered. Accounts Payable means Accounts payable is the money a business owes vendors or suppliers for bills not yet paid. The difference is that they apply to different tax, accounting, or business situations and should not be treated as interchangeable.

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