What is Accounts Receivable?

Accounts Receivable (AR) is the balance of money due to a company for goods or services delivered or used but not yet paid for by customers. It is essentially a line of credit extended by a company to its customers. Managing AR effectively is crucial for maintaining healthy cash flow and financial stability. Common uses include tracking invoices, managing customer payments, and forecasting future revenue. AR is often a key component of a company's working capital.