What is Accounts Receivable (AR)?
What customers owe you for what you have already delivered - the invoices side of the ledger.
Accounts Receivable (AR): definition
Accounts receivable is money you have earned but not yet collected. When you invoice a customer on terms, it becomes AR until they pay. Managing AR well - invoicing promptly, following up, and keeping DSO low - is essential to cash flow, because revenue on the P&L does you no good until it turns into cash in the bank.
- A current asset: invoices issued but not yet collected
- Aging buckets (current, 30, 60, 90+ days) reveal collection health
- DSO measures how fast AR converts to cash
- Slow AR ties up working capital and strains liquidity
How Fintra handles it
Fintra automates AR from invoice to cash: it issues invoices, tracks aging, sends reminders, and flags overdue accounts with AI, so collection does not depend on someone remembering to chase. Payments reconcile against AR automatically, DSO stays visible by customer, and the cash forecast reflects expected collections.
Worked example
| Bucket | Amount | Action |
|---|---|---|
| Current | $180,000 | On terms |
| 1–30 days | $60,000 | Reminder sent |
| 31–60 days | $25,000 | Follow-up call |
| 60+ days | $12,000 | Escalate / hold credit |
Frequently asked questions
Is accounts receivable an asset?
Yes, a current asset. It represents revenue you have earned and expect to collect. It converts to cash when the customer pays, which is why keeping AR current is so important to liquidity.
What is AR aging?
AR aging groups outstanding invoices by how overdue they are (current, 1–30, 31–60, 60+ days). It shows the health of your receivables and which accounts need follow-up. Fintra maintains the aging live and prompts action on overdue buckets.
How do you reduce accounts receivable days?
Invoice promptly and accurately, set clear terms, automate reminders, and follow up quickly on overdue accounts. Lower DSO means faster cash. Fintra automates invoicing and dunning and flags slow payers.
How does Fintra manage AR?
Fintra issues invoices, tracks aging, automates reminders, flags overdue accounts, and reconciles payments against AR - keeping DSO visible by customer and feeding expected collections into the cash forecast.
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