What is Accounts Receivable?
Business Terms
Explained Simply
Accounts receivable is a current asset on the balance sheet. When you issue an invoice, the amount becomes a receivable. When the customer pays, the receivable is reduced and cash increases. Key metrics include debtor days (how long customers take to pay) and the aging schedule (how old outstanding invoices are). In South Africa, bad debts can be claimed as a tax deduction once they meet SARS criteria. Accounter tracks receivables automatically and sends payment reminders.
Related Terms
- InvoiceAn invoice is a commercial document issued by a seller to a buyer, detailing the products or services provided, quantities, prices, and payment terms.
- Accounts PayableAccounts payable (also called creditors) is the money a business owes to its suppliers for goods or services received but not yet paid for.