Accounts Receivable (AR)

Date created: Feb 10, 2023  •   Last updated: Feb 10, 2023

What is Accounts Receivable

Accounts Receivable can be found on the Balance Sheet or Statement of Financial Position as part of current assets. This account reflects customer accounts that the company has invoiced for goods and services delivered. The amount is expected to be received based on the payment terms stated on the invoice within a year.

Accounts Receivable Formula

ƒ Sum(all invoices issued to customers and expected to be received within one year)

How to calculate Accounts Receivable

A company issues 3 invoices to customers for goods/services that have been delivered or will be delivered within the terms stated on each invoice. The first invoice is for $30 and is due net 60 days, the second invoice is for $100 and is due net 30 days, and the third invoice is for $50 due net 30 days. As of month end all of these invoices have not been received. To calculate accounts receivable you need to add these invoices ( $30+$100+$50=$180). The company’s accounts receivable totals $180 and will fall under current assets on the balance sheet.

Start tracking your Accounts Receivable data

Use Klipfolio PowerMetrics, our free analytics tool, to monitor your data. Choose one of the following available services to start tracking your Accounts Receivable instantly.

Klipfolio dashboard image

Metric Toolkit