Accounts receivable are a company’s outstanding invoices or money owed by its clients.
An easy way to understand accounts receivables is to say they are a company’s unpaid sales by their customers. It’s a kind of credit that companies extend to clients and payments are usually due within a few days to a year. Essentially, the company accepts an IOU from the customer in good faith that they will be paid.
Accounts receivable are usually considered an asset on a company’s balance sheet because the customer is legally obligated to pay the debt.
Recording and tracking receivables has seen huge advances with the widespread implementation of cloud (online) invoice delivery and easy payment processing.
Accounts receivable are the opposite of accounts payable. Accounts payable are debts that a company owes to their suppliers and vendors, whereas accounts receivable are debts owed to the company by their customers.
Giavic, a Miami Consulting firm can advise you in all of these areas.