Definition
Accounts receivable
Accounts receivable is the money customers owe a business for work already done but not yet paid. It represents invoices that are outstanding. Managing accounts receivable well, with timely invoicing and reminders, keeps cash flowing and prevents unpaid bills from piling up.
Accounts receivable, often shortened to AR, is the total of what your customers still owe you. Every unpaid invoice adds to it. Healthy AR means bills get paid promptly; growing, aging AR is a warning sign of cash flow trouble.
Managing AR is about timely billing and gentle persistence. Sending invoices right after a job and following up on overdue ones, sometimes automatically, keeps money moving from completed work into your bank account instead of sitting uncollected.
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