Business glossary
Accounts receivable
Amounts customers owe a business for goods or services already provided.
Example
A designer completes a $1,200 project and sends an invoice. A $400 payment leaves $800 of accounts receivable. A later credit or payment changes the outstanding balance; sending another copy of the invoice does not create a second receivable.
How it differs from related terms
An invoice total is not necessarily the amount still owed. Track payments and credits against the original invoice, and use the due date to distinguish outstanding balances from overdue balances.
Frequently asked questions
What is an example of accounts receivable?
A designer completes a $1,200 project and sends an invoice. A $400 payment leaves $800 of accounts receivable. A later credit or payment changes the outstanding balance; sending another copy of the invoice does not create a second receivable.
How should accounts receivable be interpreted?
An invoice total is not necessarily the amount still owed. Track payments and credits against the original invoice, and use the due date to distinguish outstanding balances from overdue balances.