Accounts Receivable
Back to GlossaryWhat is Accounts Receivable? Accounts Receivable (AR) represents the money owed to a company by its customers for goods or services delivered on credit. It is recorded as a current asset on the balance sheet and plays a vital role in managing cash flow and liquidity. Efficient AR management ensures timely collections, reduces the risk of bad debt, and improves overall financial performance. Finance leaders closely monitor AR metrics such as Days Sales Outstanding (DSO) to assess the effectiveness of credit and collections policies.
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