What is Accounts Receivable?
Accounts Receivable
Accounts Receivable (AR) is the amount of money owed to a startup by customers for products or services delivered but not yet paid.
Why It Matters for Startups
Essential for navigating early-stage business execution; mastering Accounts Receivable allows founding teams to scale operations, manage risk, and optimize efficiency for balance sheet audits and working capital optimization.
Detailed Deep Dive
Accounts Receivable (AR) tracks outstanding customer invoices. Managing AR aging is essential for maintaining positive cash flow and optimizing working capital.
Frequently Asked Questions
Q:Where does AR sit on the balance sheet?
It is listed as a current asset, representing cash that is expected to be collected in the short term.
Q:What is AR aging?
A report that categorizes outstanding invoices by the number of days they have been unpaid (e.g. 0-30, 31-60, 61-90 days).
Quick Facts
- CategoryMetrics
- Key ApplicationBalance sheet audits and working capital optimization
Coverage Trend12 Weeks
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