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Current Accounts Receivable

What is Current Accounts Receivable (CAR)?

Current account(s) receivable (CAR) is a KPI used to track the amount of money B2B customers owe your business. If your account receivable balances are paid on time, you’re more likely to enjoy a healthy cash flow. However, payment delays can lead to trouble meeting business obligations.

With the help of CAR, you’ll have a clearer picture of your company’s financial stability and liquidity. This can make it easier to identify:

  • Your business’s debtors
  • The amounts your debtors owe
  • Your total accounts receivable
  • The days remaining until debt repayment periods expire
  • Delinquent debtors

Finally, CAR is often a variable used to calculate other important business metrics like days sales outstanding (DSO) and order-to-cash (O2C).

Related terms

30-Day and 13-Week Operating Cash Burn
30-day and 13-week operating cash burn are also known as the “burn rate.” These are the rates at which a business consumes its cash reserves when it isn’t bringing in profit. 
Account Reconciliation
Account reconciliation is the process of comparing two sets of records to ensure their accuracy and consistency.
Accounts Payable
Accounts payable (AP) refers to the amount of money that a business owes to its suppliers or creditors for goods or services purchased on credit.
Accounts Payable Days
Accounts Payable Days (AP Days), also referred to as Days Payable Outstanding (DPO), is a financial ratio that measures the average time a company takes to pay its suppliers or vendors for credit purchases.
Accounts Payable Turnover
Accounts payable turnover explains how many times a business pays its creditors in a set timespan. Companies can use this metric to measure their short-term liquidity.
Accounts Receivable Turnover
The accounts receivable turnover ratio (or debtor turnover ratio) allows businesses to evaluate their debt collection efficiency.