Definition of financial term - Invoice Factoring
What is an account receivable ?
This is the money a customer owes to a company or individual for the goods or services it has received from that company or individual.
Accounts receivables are normally due to a company within agreed payment periods of 15, 30, 45 or 60 days.
Typically accounts receivables are classed as current assets on business balance sheets as they are expected to be used within one year or business cycle.
Receivable and Payables
Accounts receivable is one item in a chain of accounting transactions concerned with charging customers owing money to an individual or company for goods or services delivered. Typically this accounting process involves creating an invoice and delivering it to each customer.
This phrase is not to be confused with accounts payable. The latter refers to payments owed by an individual or company to suppliers.