Definition

Noun (plural form, treated as singular or plural) * Money owed to a business by its customers: This term refers to the total amount of money that customers are legally obligated to pay a company for goods or services that have been delivered or used but not yet paid for. It represents a line of credit extended by the seller and is considered a current asset on the company's balance sheet.

Usage

• "Accounts receivable" is a standard accounting term. It functions as a plural noun but can be treated as singular when referring to the total sum or the department managing it.
• It is often abbreviated as AR in business contexts.
• It is the opposite of accounts payable (money the company owes to others).

Examples

• The company's accounts receivable have increased this quarter, indicating more sales on credit.
• She works in the accounts receivable department, following up on overdue invoices.
• Managing accounts receivable effectively is crucial for maintaining healthy cash flow.
• The balance sheet shows $50,000 in accounts receivable.

Advanced Usage

• Aging of accounts receivable: A report that categorizes unpaid customer invoices by their due date (e.g., 0-30 days, 31-60 days, 61-90 days past due) to assess credit risk.
• Accounts receivable turnover: A financial ratio that measures how efficiently a company collects revenue from its credit sales.

Variants and Related Words

• Receivable (adj./n.): As an adjective: capable of being received. As a noun (often plural: receivables): a debt owed to a business, synonymous with accounts receivable.
• Debtor: A customer or entity that owes money, contributing to the accounts receivable total.
• Invoice: The itemized bill sent to a customer, which creates an entry in accounts receivable.

Synonyms

• Receivables
• Trade receivables
• Debtors (commonly used in British accounting)

Related Phrases

• To collect on accounts receivable: The process of obtaining payment from customers.
• To write off an account receivable: To remove an uncollectible debt from the accounts receivable ledger, recognizing it as a loss.

Noun

1. a creditor's accounts of money owed to him; normally arise from the sale of products or services