ClockoutWhat is accounts receivable?
Accounts receivable (AR) is the total money owed to a business by clients for invoiced work that has not yet been paid.
Accounts Receivable explained
Accounts receivable represents revenue you have earned and invoiced but not yet collected. For freelancers and small service teams, AR is often the single biggest cash flow variable. High AR means you are financing your clients' operations with your own cash. The average freelancer has $5,000-15,000 in outstanding AR at any time.
Example
A consultant has 3 outstanding invoices: $5,000 (due in 5 days), $3,000 (7 days overdue), and $8,000 (21 days overdue). Total AR: $16,000. The $8,000 invoice is a cash flow risk that needs immediate follow-up.
How this connects to Clockout
Clockout shows your total outstanding AR across all clients with sent/viewed/overdue/paid status on every invoice. Automated reminders reduce the average days-to-payment so AR stays lower.
Related terms
Learn more
Invoice Aging
Invoice aging is a report that categorizes outstanding invoices by how long they have been unpaid, typically in 30-day buckets (current, 1-30 days, 31-60 days, 61-90 days, 90+ days).
Days Sales Outstanding
Days sales outstanding (DSO) measures the average number of days it takes to collect payment after an invoice is sent.
Cash Flow
Cash flow is the movement of money in and out of a business over a specific period. Positive cash flow means more money is coming in than going out.
Questions, answered
Frequently asked questions
What is accounts receivable?
Accounts receivable (AR) is the total money owed to a business by clients for invoiced work that has not yet been paid.
Why does accounts receivable matter for freelancers?
Clockout shows your total outstanding AR across all clients with sent/viewed/overdue/paid status on every invoice. Automated reminders reduce the average days-to-payment so AR stays lower.
From definition to workflow
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