Accounts Receivable (AR) are those who need to pay you for your offering or the services and products you provide (ie, what clients owe you). Accounts receivable can be divided into to current or short term (less than one year old), long term (more than one years old) or over due.
AR is any amount of money owed by customers for purchases made on credit.
Understanding Accounts Receivable
Accounts receivable refers to the outstanding invoices a company has or the money clients owe the company. The phrase refers to accounts a business has the right to receive because it has delivered a product or service. Accounts receivable, or receivables represent a line of credit extended by a company and normally have terms that require payments due within a relatively short time period. It typically ranges from a few days to a fiscal or calendar year.