Accounts Receivable

Also called AR

Money customers owe you for goods or services already delivered but not yet paid for. An asset on the balance sheet until it is collected.

Why it matters

Large or slow receivables tie up cash you have technically earned but cannot spend, which can strangle a growing business. Getting customers to pay faster is a quiet but powerful way to improve cash flow.

For example

An enterprise customer has been invoiced 15 lakh on net-60 terms, so that amount sits as accounts receivable, earned but not yet collected.

Related terms

Accounts Payable Working Capital Cash Flow

Go deeper

See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.

eChai Partner Brands