Accounts Receivable
Short answer
Accounts receivable (often called A/R) is the money owed to a business by customers who have been invoiced but have not yet paid. It is an asset on the books.
Why it matters
A/R tracking shows what customers owe and how long it has been outstanding. It is essential for collections, cash flow, and recognizing revenue accurately.
How it works
When an invoice is sent, it is recorded as accounts receivable. When the customer pays, the payment clears the A/R entry and increases cash. The A/R aging report shows which invoices are current and which are overdue.
A simple example
A business invoices a client $2,500 on net-15 terms. The $2,500 sits in accounts receivable until the client pays, at which point it moves from A/R into the cash account.
Related terms
Related service
Monthly Bookkeeping
When you may want help
If you cannot tell which customers owe you, how old invoices are, or whether payments are being tracked correctly, monthly bookkeeping with A/R review can clarify this.
Written and reviewed by Rachel Armstrong, owner and bookkeeper at Armstrong Quality Financial Services. QuickBooks Online Level 1 ProAdvisor. This entry explains a general concept and is not individualized tax, legal, or investment advice.
QuickBooks ProAdvisorLevel 1 CertifiedMore answers that might help
Bank Reconciliation
A bank reconciliation is the process of comparing the transactions in your bookkeeping records with the activity shown on a bank statement. The goal is to identify missing, duplicated, or incorrect entries and confirm that the recorded balance is supported by the bank activity.
Cleanup & Catch-UpBookkeeping Cleanup
Bookkeeping cleanup addresses errors, inconsistencies, unreconciled accounts, or organizational problems already present in the books. It is corrective work meant to fix what exists rather than simply bring it up to date.
Cleanup & Catch-UpCatch-Up Bookkeeping
Catch-up bookkeeping brings previously unrecorded or incomplete bookkeeping periods up to date when transactions, reconciliations, or other routine work has fallen behind.
Bookkeeping BasicsChart of Accounts
A chart of accounts is the organized list of every account used to categorize a business's transactions — income, expenses, assets, liabilities, and equity. It is the backbone of how financial information is structured.
Business OperationsAccounts Payable
Accounts payable (often called A/P) is the money a business owes to vendors and suppliers for goods or services purchased on credit. It is a liability on the books until the bills are paid.
Financial ReportsProfit and Loss Statement
A profit and loss statement (also called a P&L or income statement) summarizes a business's income and expenses over a period of time and shows whether the business made a profit or took a loss.