Accounts Receivable or ‘AR’ is the account of money that is in balance to an organisation or firm for the goods or services delivered or used which has not yet been paid for by the receiver or customers. They are listed on the balance sheet under the name ‘current asset’ and it represents the account of asset due, on the balance sheet, to a company in the shorter term. It is created when an organisation or firm allows a buyer to purchase or make use of good or services respectively on credit. In short, the amount of money a client owes to the company, firm or organisation is what is referred to as accounts receivable. There are legal obligations to be fulfilled and thus it is 100% that the customer or the buyer pays and completes the said debt, in a maximum of a year or less.

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