Accounts receivable represents amounts customers owe the business, commonly for invoiced sales or services. It is a balance to review, not cash already in the bank. Receipts, credit notes and other approved adjustments change the balance; the accounting basis and underlying activity determine the related reporting.
Get help with your monthly booksPractical records guidance · Updated October 8, 2026 · Fictional examples
Apply a customer payment to the intended invoice or balance using references and evidence. Recording a receipt as another sale when the invoice already captured revenue can duplicate income and leave the invoice looking unpaid.
An aged balance may be unpaid, disputed, misallocated or affected by a missing credit. Ask the responsible business contact before assuming it is collectible or should be written off. An aged report supports investigation, not an automatic collection action.
Illustrative example · Fictional data
Illustrative example: a $900 invoice has $400 collected and no credit or other adjustment. The remaining receivable is $500. The $400 receipt is not a second $400 invoice and does not prove that the full $900 was collected.
No. Revenue describes activity over a period; receivables describe amounts still owed at a point in time.
Reporting and reviewing balances do not automatically include contacting customers or collecting money.
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