What is Accounts Receivable?
Accounts receivable is the money customers owe a business for goods or services already supplied on credit.
Updated
Meaning
English
Accounts receivable is the money customers owe a business for goods or services already supplied on credit.
Roman Urdu
Accounts receivable woh raqam hai jo gahakon ne udhaar par liye gaye saman ya service ke badle dukaan ko deni hai.
Also called receivables, debtors, AR, lena, baqaya.
Example
A pharmacy supplies three clinics on monthly credit. On the 30th, receivables are 410,000 rupees: 180,000 under 30 days, 150,000 between 30 and 90 days, and 80,000 older than 90 days.
How it works
In a Pakistani shop, receivables are simply the total of all khata balances. Accountants split them by age, called an ageing report: amounts due under 7 days, under 30, under 90 and older. The older the balance, the less likely it is to be paid, so collection efforts should start with the oldest amounts from customers who are still buying.
Compare receivables with monthly credit sales. If customers on average take longer and longer to pay, the shop is lending more of its working capital. A balance that has not moved in months may need to be written off as a bad debt rather than counted as an asset.
In Nafaa
Every customer's khata balance in Nafaa adds up to the shop's receivables. The customer directory sorts and filters balances by age (current, 7, 30 and 90 days), shows the oldest due date, and sends WhatsApp reminders from templates.
Related terms
- Khata
A khata is a ledger, traditionally a paper register, that records what each customer owes a shop on credit and what they have paid back.
- Udhaar
Udhaar is credit given to a customer: goods are taken now and paid for later.
- Accounts Payable
Accounts payable is the money a business owes its suppliers for goods or services it has received but not yet paid for.
- Cash Flow
Cash flow is the movement of money into and out of a business over a period, which shows whether it has enough cash to pay its bills on time.