This is another standard accounting term many small business owners might not use every day. It is a category of business assets.
In simple terms, Accounts Receivable is the money owed to your business by others—and those others could be customers, vendors, or any other entity you expect to receive a check or payment from.
The standard procedure in business-to-business sales is that goods or services are delivered or exchanged, and this is recorded on an invoice. Your commercial customers expect to be invoiced and to pay your business at a later date, according to specific terms you've negotiated.
The money your business is watiting to receive from outstanding invoices shows up on your Balance Sheet as Accounts Receivable.
Assets is a term that refers to any property a business owns that has value. In practical terms, assets are possessions controlled by a business—think things like tools, materials, machinery,...Continue reading...