Accounts receivable
In accounting, accounts receivable means what customers owe us for invoices already issued.
- Layer
- Lexicon
- Defined in
- Lexicon
- Also called
- AR
- Components
- 3
Authority
This definition follows ASC 310.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
The lesson that teaches this
Accounting, 0 to 1 — a free course taught end to end on one month of one company, with the spreadsheet exercises to work it yourself.
Accounts receivable, in use
Quoted from the 11 documents that use the word — what it does to an interface, in the spec's own sentence.
All three separate receivables from other current assets at the type level — QBO AccountType has Accounts Receivable vs Other Current Asset, NetSuite has AcctRec vs OthCurrAsset.
Lopifi APIs: Xero, QuickBooks Online, NetSuite — What actually differs
The core AR view, and the one that ties to the balance sheet.
The highest-value screen in AR, and the one most tools handle worst.
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- Accounts receivableMoney customers owe you for work you've delivered and invoiced but haven't been paid for yet. It's an asset.
- Bad debt and write-offs: allowance vs direct methodHow to book a customer who won’t pay: the GAAP allowance under ASC 326, the direct write-off the IRS requires, and what to do if the money comes back.
- Card and ACH payments: applying and reconciling themHow customer card and ACH payments land in the bank net of fees, how to apply them to invoices, handle partial payments and reconcile the deposit.
- SaaS revenue recognition under ASC 606, step by stepASC 606’s five steps applied to a startup SaaS contract: annual prepay, implementation fees, usage and multi-year deals, with the entries.
What it is not called
Each of these is a real word for a different thing. Using it here is what makes a product read as though it was built by someone who has not done the work.
- debtors
- receivables unqualified in mixed context
Components that render this
The concept is not documentation-only. These are the components that name it in their specification, grouped and stated exactly as the catalog states them.
Also in Foundations
Work with this concept
The calculators that compute it and the ledger payloads that carry it. A definition is where a reader starts; these are where they go next.
- Payment terms & due dates2/10 net 30 is borrowing at 37% a year. This tells you whether to take the discount.Tool
- Accounts payable vs accounts receivableAccounts payable is money the company owes to its suppliers; accounts receivable is money its customers owe it — a liability on one side of the balance sheet and an asset on the other.Compare
- Journal entry for deferred revenueWhen an annual contract is invoiced up front, debit Accounts receivable and credit Deferred revenue. As each month of service is delivered, debit Deferred revenue and credit Revenue for that month's share.Entry
- Journal entry for a sale on accountFor a sale on credit, debit Accounts receivable and credit Revenue for the price; under a perpetual inventory system also debit Cost of goods sold and credit Inventory for what the goods cost. When the customer pays, debit Cash and credit Accounts receivable.Entry
- Journal entry for writing off accounts receivableTo write off an uncollectible invoice under the allowance method, debit Allowance for credit losses and credit Accounts receivable. If the customer later pays, reinstate the receivable (debit Accounts receivable, credit Allowance) and record the cash.Entry
Defined in Lexicon. This page is generated from that document, so the two cannot disagree.