Also called: Debtors, Trade receivables
Accounts receivable
Accounts receivable are the amounts customers owe a business for goods or services already delivered and invoiced. They appear as a current asset and are the security base for invoice finance facilities.
What is an accounts receivable?
Accounts receivable are the amounts customers owe a business for goods or services already delivered and invoiced. They appear as a current asset and are the security base for invoice finance facilities.
Example
A labour hire firm invoicing $600,000 a month on 45-day terms carries close to $900,000 in receivables at any time.
Why it matters
The quality and spread of your debtor book determines how much an invoice financier will advance.