What is accounts receivable?

Accounts receivable are invoices owed to you by customers. They’re sometimes called receivables, trade debtors, or AR. It might help to think of accounts receivable as a sales invoice that your customer hasn't paid yet.

Let’s say you sell your product to a customer on credit and send them an invoice for the sale. The amount your customer owes you from that invoice is part of your accounts receivable. In your customer's records, that invoice will be part of their accounts payable. In this way, accounts payable and accounts receivable are two sides of the same transaction.

Accounts receivable might also refer to a person or team in charge of receiving or chasing up payments owed to your business. Your 'accounts receivable' might want to talk to a customer who is overdue on their payment to you.

 

Related terms:
What is accounts payable?
What is an invoice?
How do I make an invoice?
How do I send an invoice?

Related Xero feature:
Get paid faster with online invoicing software

Related Small Business Guide:
Get prompt payment on the invoices you send

Accounting Terms

Accounting terms and how-tos for beginners. Let us walk you through all the basics that you need know.

What is accounts receivable?

Accounts receivable are invoices owed to you by customers. They’re sometimes called receivables, trade debtors, or AR. It might help to think of accounts receivable as a sales invoice that your customer hasn't paid yet.

Let’s say you sell your product to a customer on credit and send them an invoice for the sale. The amount your customer owes you from that invoice is part of your accounts receivable. In your customer's records, that invoice will be part of their accounts payable. In this way, accounts payable and accounts receivable are two sides of the same transaction.

Accounts receivable might also refer to a person or team in charge of receiving or chasing up payments owed to your business. Your 'accounts receivable' might want to talk to a customer who is overdue on their payment to you.

 

Related terms:
What is accounts payable?
What is an invoice?
How do I make an invoice?
How do I send an invoice?

Related Xero feature:
Get paid faster with online invoicing software

Related Small Business Guide:
Get prompt payment on the invoices you send

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