Accounts receivable is the amount customers owe a business for goods or services already supplied on credit. The AR process includes issuing invoices, recording receipts, applying payments, following up overdue balances, and resolving deductions or disputes.
Quick reference for Accounts receivable (AR)
| Check | What it means for the transaction |
|---|---|
| Category | Orders, invoicing, accounts payable and accounts receivable |
| Record to keep | Link the order, delivery evidence, invoice, approval, adjustment and payment reference that belong to the same transaction. |
| Do not infer | An approved invoice or recorded payment does not by itself prove that funds have settled or that the open balance is reconciled. |
Accounts receivable (AR) and nearby terms
- Invoice: An invoice is a document a seller issues to request payment for supplied goods or services.
- Order-to-cash (O2C): Order-to-cash is the process from accepting a customer order through fulfilment, invoicing, payment collection, and reconciliation.
Trade finance connections
Eligible receivables may support accounts receivable financing, receivables purchase or invoice discounting.
