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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

Cash Flow from Operations
Cash flow from operations measures the money a business generates from day-to-day activities, usually over a quarter or fiscal year.
Churn Rate
Churn rate is the percentage of customers who discontinue their subscriptions or stop using a company's product or service during a specific period.
Consolidated Invoicing
Consolidated invoicing, also known as centralized billing or grouped invoicing, is a billing process in which multiple transactions or charges incurred over a specified period are combined into a single invoice for payment.
Contract Management
Contract management is the process of managing the creation, execution, and administration of contracts between parties, such as businesses, organizations, or individuals.
Credit Card Processing
Credit card processing refers to the procedures and systems involved in securely authorizing and completing electronic payments made using credit cards.
Credit Card Reconciliation
Credit card reconciliation is the process of comparing transactions recorded in a company's accounting records with those listed on credit card statements to ensure accuracy and completeness.