Accounts receivable, or debtors, is the money customers owe you for goods or services you've delivered but not yet been paid for. This guide explains why it matters for cash flow.
Published July 2026 · Updated July 2026
Accounts receivable is the total your customers owe you for invoices you've raised but not yet been paid. It's a current asset, you're owed the money, but it isn't cash until it arrives.
You can be profitable yet short of cash if receivables pile up. Watching how much is owed and how overdue it is (the 'ageing') is central to healthy cash flow, which is why prompt invoicing and follow-up matter.
Revenue is what you earned; receivables is the part of it customers still owe. Under accrual accounting you record revenue when earned, creating a receivable until paid.
A receivable you no longer expect to collect. It's written off as an expense once it's clear the customer won't pay.
Source: Investopedia ↗. This glossary is written for small business owners, so definitions are simplified. Tax rates and thresholds reflect 2026/27 UK rules and change over time. Berified does not provide accounting, tax or legal advice; always check the source or a qualified adviser.