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.
Go deeper
Related terms
Also in Starting Up
See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.
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