Definition
Money owed to a business by customers for work already delivered. An AR aging report groups those unpaid invoices by how long they have been outstanding (current, thirty days, sixty, ninety) so the ones drifting past terms are visible and can be chased before they go cold.
What it looks like in practice
Monthly contracts at eight office buildings, invoiced on the first, net-15 terms. By the twentieth the commercial cleaning company's owner has five payments in and three that aren't. One property manager is waiting on a signature from a regional office, one invoice bounced because the billing contact left the company, and one client simply hasn't opened it. All three are revenue the crews already earned scrubbing floors at midnight, sitting in receivables instead of the bank. So the owner works the aging list every Friday: a polite nudge at day sixteen, a phone call at thirty, and the new billing contact confirmed in writing before next cycle.
Why it matters
For anyone who invoices instead of collecting at the counter, receivables are where earned money quietly stalls. The work is done and the revenue is booked, but it isn't spendable until the customer actually pays, and an invoice that ages tends to get harder to collect in full. Most of the delay isn't refusal; it's a wrong contact, a missing PO number, an email nobody read. Chasing that is unglamorous and easy to postpone when you're busy delivering the work, which is exactly why it slips. Receivables discipline is the input that makes any cash flow forecast worth trusting.