What Is Accounts Receivable?

Accounts receivable (AR) is the money customers owe you for work you have delivered and invoiced but haven't been paid for yet. On a balance sheet it is a current asset, because you expect to turn it into cash, usually within weeks.

For a freelancer or small business, AR is the total of every open invoice. It answers a practical question: how much money is owed to me right now? A business can be profitable on paper and still short of cash when too much of its income sits in receivables.

Accounts payable is the reverse: the money you owe your own suppliers. Two measures help you keep AR under control. An AR aging report groups unpaid invoices by how overdue they are, and days sales outstanding (DSO) is the average number of days it takes to get paid. Shorter payment terms, deposits and prompt reminders all bring AR down.

SolidInvoice tracks the payment status of every invoice, so you can see what is outstanding and export the list to CSV for your accountant.