What is Accounts Receivable

Often times a business can show outstanding debts with customers as an asset on there balance sheets. This in known as Accounts Receivable. Accounts Receivable assumes the roll of money that customer or client still owes a business. When the business has delivered a product or service they usually create an invoice, which in a number of cases outlines a payment agreement, in which the customer has agreed to adhere too.

Accounts Receivable is responsible for keeping track of the number of sales that have been made, and the funds received for work performed or services rendered. They also monitor the money that is still owed to the company at the end of each month. Most companies have people who are dedicated to collecting such outstanding funds. They are known as collections. When they are collected they are added to the businesses balance sheet by the cashiering team.

Many companies choose to outsource these task to Account Receivable professionals often know as AR financing.

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