Accounts receivable
In one sentenceAmounts owed to the business by its customers for goods or services sold to them on credit.
Simply put
When you sell on credit, the goods turn into “money held by the customer.” This money is a current asset, but it pays no salaries until it is collected.
Track it with a receivables aging report: the older the debt, the lower the chance of collecting it, and you may need an allowance for doubtful debts.
Worked example
A building materials distributor tracks its customers' account during the year.
Customers' balance at the start of the year80,000 SAR
Credit sales during the year200,000 SAR
Collected from customers170,000 SAR
Accounts receivable at year-end (80,000 + 200,000 − 170,000)110,000 SAR
Don't confuse it with
Accounts payableThe opposite: what you owe suppliers.
in FullScreen ERP
Credit sales in the system come with a credit limit for each customer and an alert when it is exceeded. Sales and POS