Glossary
Accounts receivable
Accounts receivable is what customers owe a business for goods or services already delivered and invoiced. It is a current asset, but only to the extent it will actually be collected, which is why an allowance for doubtful accounts sits against it. Receivables that age past terms are the most common reason a profitable business runs out of cash. Tracking days sales outstanding turns that risk into a number you can manage.
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