What is Accounts Receivable?

Companies while doing business mostly need to do it on credit, where some businesses demand more credit and some get away with very few days of credit. Let’s understand what this credit is.

Companies generally sell goods and services to their customers on credit.

That is, they deliver the goods and services immediately, send an invoice, and then get paid later.

They keep track of all the money their customers owe them using an accounting entry in their books called accounts receivable.

It is also known as trade receivable which is the accounting term used to refer to the money that the Company should receive from its customers for the goods or services it provided on credit.