Accounts Receivable

What is Accounts Receivable?

Accounts receivable refers to the money a business is owed by its customers for products or services that have been delivered but not yet paid for. Recorded as a current asset on the balance sheet, accounts receivable is a key indicator of a company's short-term financial health and liquidity. Efficient accounts receivable management ensures steady cash flow, reduces bad debt, and supports business growth. This term is often associated with invoicing, payment processing and credit sales in accounting and finance.

Related terms

Automated Clearing House (ACH)

An Automated Clearing House (ACH) is an electronic network that facilitates the transfer of funds between bank accounts in the United States (and internationally with some variations).

Average Days Delinquent

Average day(s) delinquent (ADD) is a metric that helps determine the efficiency of a company’s debt collection efforts.

B2B Payments

B2B payments, short for Business-to-Business payments, refer to financial transactions that occur between companies. This is distinct from B2C (Business-to-Consumer) transactions where businesses sell goods or services directly to individual customers.

Billing

Billing is the process of generating invoices or bills to request payment from customers or clients for goods sold or services rendered. It is a fundamental aspect of business operations that involves documenting the details of transactions, calculating charges, and issuing invoices to customers for payment.

Billing Automation

Billing automation is the use of software to accelerate the billing process and eliminate manual workflows. This includes invoice creation, processing and delivery, payment tracking, subscription management and a variety of other tasks.

Cash Conversion Cycle

The cash conversion cycle (CCC) measures the rate at which your business converts its investments and inventory into cash.