AR — Accounts Receivable
Definition: Money owed to a business by its customers for goods or services already delivered but not yet paid for. It sits on the balance sheet as an asset — revenue you have earned but cannot spend yet.
Example
A consultant invoices a client $12,000 with net-30 terms. Until the wire lands, that $12,000 is AR — earned revenue the consultant cannot use to pay rent.
When you'll hear it
AR shows up most often in board meetings, quarterly business reviews, and strategy off-sites. When someone uses it, they're usually referring to accounts receivable — and they expect the room to already know what that means.
FAQs
Why does AR matter for a solo consultant?
Because profit is not cash. A packed project pipeline with slow-paying clients can still leave you unable to make payroll or quarterly taxes. AR is the gap between work done and money in the bank.
How do you keep AR under control?
Shorten payment terms, invoice immediately on delivery, require deposits upfront, and follow up on overdue invoices on a fixed schedule. Watch DSO — days sales outstanding — to see how long cash sits in limbo.
What does AR stand for?
AR stands for Accounts Receivable.
What does AR mean in business and finance?
Money owed to a business by its customers for goods or services already delivered but not yet paid for. It sits on the balance sheet as an asset — revenue you have earned but cannot spend yet.
Where will I hear AR used at work?
AR comes up most often in board meetings, quarterly business reviews, and strategy off-sites. It's used as shorthand for accounts receivable, so people assume you already know the term.