Meaning
Accounts Receivable (AR) is money owed to a business by its customers for goods/services delivered on credit. It’s a current asset.Definition
AR represents outstanding invoices. It signifies customer payments due for purchases made without immediate cash.How It Works
A business extends credit, recording the debt as AR. Customers pay within a specified period, like 30 days.Importance
Effective AR management is vital for business cash flow and financial health, ensuring prompt collection.Author
