Accounts Receivable
Accounts receivable is the total of every invoice you’ve sent that hasn’t been paid yet — the money owed to you, across however many clients. Knowing this one number at a glance is the difference between chasing on a schedule and chasing when you happen to remember.
What it means
Every unpaid invoice is a receivable until it’s paid, written off as bad debt, or cancelled with a credit note. Add them all up and you get a single number that answers a question worth checking weekly: how much money is currently owed to me, and by whom?
The number alone isn’t the whole picture — a $3,000 receivable that’s three days old is nothing to worry about, and a $300 receivable that’s four months old is a real problem. That’s what aged receivables breaks out separately, but the total is still the starting point for the whole conversation.
You’ve sent invoices to five clients this month totaling $4,200, none of it paid yet. Your accounts receivable is $4,200 — the number worth checking before deciding whether you can afford to buy a new tool this week.
Only checking accounts receivable when cash feels tight, instead of on a fixed weekly rhythm — by the time it feels tight, several of those invoices are already well overdue.
See also
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