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What is Accounts Receivable (AR)?

July 14, 2021 admin Comments Off on What is Accounts Receivable (AR)?

The purpose of a business is to make money. That means selling products or services to bring in revenue. These positive cash inflows are part of accounts receivable. What is accounts receivable (AR)? In a nutshell, it’s the sum of outstanding debts owed to the business by its customers. It’s a subset of a company’s working capital, classified as a current asset on the balance sheet. In simpler terms: it’s the promise of future realized cash.
Accounts receivable is a major indicator for a company’s cash flow. It offsets accounts payable, which are the debts a company owes. A strong presence …read more […]