Accounts Receivable

The amount of money owed to a company by its customers for goods or services sold on credit.

Accounts Receivable refers to the amounts of money that a business is owed by its customers for goods or services provided on credit. It represents the sales revenue that is yet to be collected and typically has a specified payment period, such as 30 or 60 days. Managing accounts receivable effectively is crucial for maintaining a healthy cash flow and ensuring timely collection of payments. By implementing efficient invoicing processes, monitoring outstanding balances, and following up with customers on overdue payments, small business owners can optimize their working capital and improve overall financial performance.