Accounts Receivable (AR) is a form of business debt that occurs when customers purchase goods from a business on credit. By extending credit to customers, businesses can increase sales and cash flow – but it also means organizations need to actively manage their AR. To ensure customers are paying on time, businesses must regularly review their outstanding balance, dispute any discrepancies, and monitor payment activity. Additionally, for larger transactions, contracts should be established with payment terms spelled out clearly. Keeping an eye on accounts receivable also helps businesses spot potential issues and take corrective action if necessary. In short, managing accounts receivable is an essential part of maintaining positive cash flow and staying competitive in today’s business world.