What are Accounts Receivable?

Accounts Receivable is part of the Assets on a Balance Sheet, and it details the money due to the company from its customers or debtors in the near future.

Accounts Receivable will include money which should be received by the company from those who owe it. This appears in the Current Assets section of the Balance Sheet. The money should be receivable within the next 30 or 90 days, generally.

This might be rent payments or other bills which are paid regularly or after the goods or services have been rendered. An account receivable also might include interest due.

An invoice might serve as the documentation for the account receivable, a copy of which should be given to the customer, perhaps through a billing procedure, and the invoice will detail which goods or services were sold, how much the customer owes, and when it is due.