{"id":9491,"date":"2026-09-10T00:27:28","date_gmt":"2026-09-10T05:27:28","guid":{"rendered":"https:\/\/www.emagia.com\/blog\/?p=9491"},"modified":"2026-09-10T00:56:02","modified_gmt":"2026-09-10T05:56:02","slug":"accounts-receivable-examples","status":"publish","type":"post","link":"https:\/\/www.emagia.com\/blog\/accounts-receivable-examples\/","title":{"rendered":"Accounts Receivable Examples: Definition, Process &#038; Real-World Examples"},"content":{"rendered":"<div class=\"bg-light-blue1 p-4 rounded-15 mb-3\">\n<p><strong>Accounts receivable (AR) is money a business is owed by customers for goods or services already delivered on credit.<\/strong> For example, if a company sends a customer a $10,000 invoice due in 30 days, the $10,000 is recorded as accounts receivable until the customer pays.<\/p>\n<p><strong>Common accounts receivable examples include:<\/strong><\/p>\n<ul>\n<li>A manufacturer shipping products and invoicing a retailer.<\/li>\n<li>A consulting company billing a client after completing a project.<\/li>\n<li>A contractor sending a progress invoice after completing a construction milestone.<\/li>\n<li>A SaaS company invoicing an enterprise customer on monthly payment terms.<\/li>\n<li>A healthcare provider waiting for payment from a patient or insurer.<\/li>\n<\/ul>\n<p class=\"mb-0\"><strong>In simple terms: Accounts receivable is earned revenue that has not yet become collected cash.<\/strong><\/p>\n<\/div>\n<section id=\"what-is-accounts-receivable\">\n<h2>What Is Accounts Receivable?<\/h2>\n<p>Accounts receivable represents money customers owe a business after purchasing goods or services on credit. Instead of collecting payment immediately, the business gives the customer an agreed period to pay, such as <a href=\"https:\/\/www.emagia.com\/blog\/net-15-payment-terms\/\">Net 15<\/a>, Net 30, or Net 60.<\/p>\n<p>Until the invoice is paid, the amount remains in accounts receivable. In most businesses, accounts receivable is recorded as a current asset because the company expects to convert the outstanding balance into cash within its normal operating cycle.<\/p>\n<p>Accounts receivable affects more than accounting. It influences cash flow, working capital, collection performance, customer relationships, financial reporting, and business planning.<\/p>\n<\/section>\n<section id=\"accounts-receivable-examples\">\n<h2>Accounts Receivable Examples by Industry<\/h2>\n<p>Accounts receivable exists whenever a business delivers goods or services before receiving payment. The following examples show how AR works in different industries.<\/p>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">1. Manufacturing Accounts Receivable Example<\/h3>\n<p>A manufacturer ships $50,000 worth of finished products to a retailer with Net 30 payment terms. Once the products are delivered and invoiced, the $50,000 becomes accounts receivable.<\/p>\n<ul>\n<li>The manufacturer has completed the sale.<\/li>\n<li>The retailer owes $50,000.<\/li>\n<li>The amount is recorded as accounts receivable.<\/li>\n<li>The business has earned revenue but has not yet collected cash.<\/li>\n<\/ul><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">2. Professional Services Accounts Receivable Example<\/h3>\n<p class=\"mb-0\">A consulting company completes a project and sends a client a $20,000 invoice due in 30 days. Until the client pays the invoice, the $20,000 remains in accounts receivable.<\/p>\n<\/p><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">3. Construction Accounts Receivable Example<\/h3>\n<p class=\"mb-0\">A construction contractor completes a project milestone and sends a progress invoice to the customer. The outstanding invoice remains accounts receivable until the customer approves and pays it.<\/p>\n<\/p><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">4. SaaS Accounts Receivable Example<\/h3>\n<p class=\"mb-0\">A software company provides services to an enterprise customer and bills the customer monthly. Once the invoice is issued, the unpaid balance becomes accounts receivable.<\/p>\n<\/p><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">5. Healthcare Accounts Receivable Example<\/h3>\n<p class=\"mb-0\">A healthcare provider delivers services and waits for payment from an insurance company or patient. The outstanding balance is recorded as accounts receivable until payment is received.<\/p>\n<\/p><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">6. Wholesale Accounts Receivable Example<\/h3>\n<p class=\"mb-0\">A wholesaler ships products to a retailer and allows payment after delivery. If the retailer has multiple unpaid invoices, the total outstanding balance becomes part of the wholesaler&#8217;s accounts receivable.<\/p>\n<\/p><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3>7. Subscription Business Accounts Receivable Example<\/h3>\n<p>A subscription business invoices a business customer for quarterly or annual services. The amount remains accounts receivable until the customer completes payment.<\/p>\n<\/p><\/div>\n<\/section>\n<section id=\"accounts-receivable-process\">\n<h2>How the Accounts Receivable Process Works<\/h2>\n<p>The <a href=\"https:\/\/www.emagia.com\/blog\/what-is-accounts-receivable-process-cycle\/\">accounts receivable process<\/a> is the journey from approving customer credit to collecting and applying payment.<\/p>\n<p><strong>Accounts Receivable Process:<\/strong><br \/>\n    Credit Approval \u2192 Delivery \u2192 Invoice \u2192 Accounts Receivable \u2192 Collection \u2192 Cash Application<\/p>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">1. Approve Customer Credit<\/h3>\n<p class=\"mb-0\">The business decides whether a customer qualifies to buy on credit and establishes payment terms, credit limits, and billing requirements.<\/p>\n<\/p><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">2. Deliver Goods or Services<\/h3>\n<p class=\"mb-0\">The business ships the product, completes the service, or reaches an approved project milestone. Accurate delivery records and supporting documentation can help prevent invoice disputes later.<\/p>\n<\/p><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">3. Create and Send the Invoice<\/h3>\n<p>The business creates an invoice showing the goods or services provided, the amount due, the payment terms, and the due date.<\/p>\n<p>A strong invoice should include:<\/p>\n<ul class=\"mb-0\">\n<li>Customer name and billing contact<\/li>\n<li>Invoice number and invoice date<\/li>\n<li>Description of goods or services<\/li>\n<li>Quantity and pricing<\/li>\n<li>Taxes, discounts, or adjustments when applicable<\/li>\n<li>Payment due date<\/li>\n<li>Accepted payment methods<\/li>\n<li>Purchase order or contract references when required<\/li>\n<\/ul><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">4. Record the Receivable<\/h3>\n<p class=\"mb-0\">Once the invoice is issued, the outstanding amount is recorded as accounts receivable and linked to the customer account and financial records.<\/p>\n<\/p><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">5. Monitor Payment Status<\/h3>\n<p class=\"mb-0\">The AR team tracks whether invoices are current, due soon, overdue, disputed, partially paid, or ready for escalation.<\/p>\n<\/p><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">6. Follow Up on Unpaid Invoices<\/h3>\n<p class=\"mb-0\">If payment is not received by the due date, the business follows up with the customer to confirm payment status or identify potential issues.<\/p>\n<\/p><\/div>\n<div class=\"border p-4 rounded-15 mb-3\">\n<h3 class=\"mt-0\">7. Apply and Reconcile Payment<\/h3>\n<p class=\"mb-0\">When payment arrives, it is matched to the correct invoice and recorded in the accounting system. Accurate cash application helps ensure customer balances and financial reports remain correct.<\/p>\n<\/p><\/div>\n<\/section>\n<section id=\"accounts-receivable-vs-payable\">\n<h2>Accounts Receivable vs. Accounts Payable<\/h2>\n<p>Accounts receivable and accounts payable represent opposite sides of business credit.<\/p>\n<div class=\"table table-striped custom-table custom-table-c\">\n<table>\n<thead>\n<tr>\n<th>Accounts Receivable<\/th>\n<th>Accounts Payable<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Money customers owe the business<\/td>\n<td>Money the business owes others<\/td>\n<\/tr>\n<tr>\n<td>Usually recorded as a current asset<\/td>\n<td>Usually recorded as a current liability<\/td>\n<\/tr>\n<tr>\n<td>Created when customers buy on credit<\/td>\n<td>Created when the business purchases on credit<\/td>\n<\/tr>\n<tr>\n<td>Primary goal: collect payment<\/td>\n<td>Primary goal: pay approved bills<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<p><strong>Quick answer:<\/strong> Accounts receivable is money customers owe your business. Accounts payable is money your business owes suppliers, vendors, or other parties.<\/p>\n<\/section>\n<section id=\"why-accounts-receivable-matters\">\n<h2>Why Accounts Receivable Matters<\/h2>\n<p>Accounts receivable connects credit sales to cash flow. A business can report strong revenue while still experiencing cash pressure if customers take too long to pay.<\/p>\n<p>Accounts receivable can affect:<\/p>\n<ul>\n<li>Cash flow<\/li>\n<li>Working capital<\/li>\n<li>Revenue collection<\/li>\n<li>Customer relationships<\/li>\n<li>Credit risk<\/li>\n<li>Financial reporting<\/li>\n<li>Bad debt exposure<\/li>\n<\/ul>\n<p>Strong <a href=\"https:\/\/www.emagia.com\/blog\/best-accounts-receivable-ar-automation-software-vendor\/\">AR management<\/a> helps businesses understand when expected cash will arrive and identify collection risks before unpaid balances become significantly overdue.<\/p>\n<\/section>\n<section id=\"common-ar-problems\" class=\"border p-4 rounded-15 mb-3\">\n<h2 class=\"mt-0\">Common Accounts Receivable Problems<\/h2>\n<hr>\n<h3>Late Invoicing<\/h3>\n<p>Sending invoices late delays the entire collection cycle. Customers cannot begin their approval and payment process until they receive the correct invoice.<\/p>\n<hr>\n<h3>Incorrect or Missing Invoice Information<\/h3>\n<p>Missing <a href=\"https:\/\/www.emagia.com\/blog\/purchase-order-number\/\">purchase order numbers<\/a>, incorrect pricing, incomplete descriptions, or incorrect billing contacts can delay payment.<\/p>\n<hr>\n<h3>Customer Disputes<\/h3>\n<p>Pricing, delivery, product quality, contract, or service disputes can prevent invoices from being approved and paid.<\/p>\n<hr>\n<h3>Inconsistent Follow-Up<\/h3>\n<p>Without a structured collection process, invoices can become significantly overdue before the business identifies the problem.<\/p>\n<hr>\n<h3>Cash Application Errors<\/h3>\n<p class=\"mb-0\">Payments that are not matched correctly can create inaccurate customer balances and cause teams to follow up on invoices that have already been paid.<\/p>\n<\/section>\n<section id=\"improve-accounts-receivable\">\n<h2>How to Improve Accounts Receivable Performance<\/h2>\n<ol class=\"pl-2\">\n<li>Invoice customers as soon as delivery or approval requirements are met.<\/li>\n<li>Document payment terms before the sale is completed.<\/li>\n<li>Maintain accurate customer billing information.<\/li>\n<li>Include required purchase order and contract information on invoices.<\/li>\n<li>Send proactive payment reminders.<\/li>\n<li>Prioritize high-value and high-risk overdue balances.<\/li>\n<li>Resolve disputes quickly and assign clear ownership.<\/li>\n<li>Apply and reconcile payments accurately.<\/li>\n<li>Monitor <a href=\"https:\/\/www.emagia.com\/blog\/5-key-accounts-receivable-metrics-and-kpis\/\">accounts receivable performance metrics<\/a>.<\/li>\n<li>Automate repetitive receivables tasks where appropriate.<\/li>\n<\/ol>\n<\/section>\n<section id=\"accounts-receivable-metrics\" class=\"border p-4 rounded-15 mb-3\">\n<h2 class=\"mt-0\">Key Accounts Receivable Metrics<\/h2>\n<hr>\n<h3>Days Sales Outstanding (DSO)<\/h3>\n<p>Days Sales Outstanding estimates how long it takes, on average, for a business to collect payment after making a credit sale.<\/p>\n<hr>\n<h3>AR Turnover Ratio<\/h3>\n<p>The <a href=\"https:\/\/www.emagia.com\/blog\/why-you-should-know-your-ar-turnover-ratio\/\">accounts receivable turnover ratio<\/a> shows how efficiently a business collects outstanding receivables over a specific period.<\/p>\n<hr>\n<h3>Accounts Receivable Aging<\/h3>\n<p>An aging report groups invoices based on how long they have remained unpaid, helping teams identify collection priorities.<\/p>\n<hr>\n<h3>Collection Effectiveness<\/h3>\n<p>Collection effectiveness measures how much of the receivable balance that should be collectible during a period is actually collected.<\/p>\n<hr>\n<h3>Dispute Rate<\/h3>\n<p class=\"mb-0\">The dispute rate helps identify how frequently invoices encounter issues that delay payment.<\/p>\n<\/section>\n<section id=\"accounts-receivable-automation\">\n<h2>When Should a Business Automate Accounts Receivable?<\/h2>\n<p><a href=\"https:\/\/www.emagia.com\/blog\/agentic-ai-production-ready-finance-operations\/\">Accounts receivable automation<\/a> can help businesses reduce repetitive manual work, improve collection visibility, and create more consistent receivables processes.<\/p>\n<p><strong>Automation can support activities such as:<\/strong><\/p>\n<ul>\n<li>Invoice delivery<\/li>\n<li>Payment reminders<\/li>\n<li>Collection task prioritization<\/li>\n<li>Customer communication tracking<\/li>\n<li>Payment matching<\/li>\n<li>Cash application<\/li>\n<li>Accounts receivable reporting<\/li>\n<li>Overdue balance monitoring<\/li>\n<\/ul>\n<p><strong>Businesses may benefit from AR automation when they experience:<\/strong><\/p>\n<ul>\n<li>High invoice volumes<\/li>\n<li>Manual collection follow-up<\/li>\n<li>Spreadsheet-based tracking<\/li>\n<li>Delayed cash application<\/li>\n<li>Growing overdue balances<\/li>\n<li>Limited visibility into collection priorities<\/li>\n<\/ul>\n<p>Automation works best when the underlying accounts receivable process, customer data, payment terms, and exception workflows are clearly defined.<\/p>\n<\/section>\n<section id=\"ar-management-checklist\" class=\"bg-light-blue2 p-4 rounded-15 mb-3\">\n<h2 class=\"mt-0\">Accounts Receivable Management Checklist<\/h2>\n<ul class=\"mb-0\">\n<li>Are customer credit terms documented?<\/li>\n<li>Are billing contacts accurate?<\/li>\n<li>Are invoices sent quickly after delivery?<\/li>\n<li>Do invoices include required purchase order and contract details?<\/li>\n<li>Is there a consistent follow-up process?<\/li>\n<li>Are disputes tracked separately from normal overdue invoices?<\/li>\n<li>Are aging reports reviewed regularly?<\/li>\n<li>Are high-value and high-risk balances prioritized?<\/li>\n<li>Are payments matched and applied accurately?<\/li>\n<li>Are recurring billing and collection problems identified?<\/li>\n<li>Are AR performance metrics monitored?<\/li>\n<\/ul>\n<\/section>\n<section id=\"gia-cta\" class=\"bg-light-blue1 p-4 rounded-15 mb-3\">\n<h2 class=\"mt-0\">Reduce Manual AR Work and Improve Collection Visibility<\/h2>\n<p>Managing accounts receivable becomes more complex as invoice volume, customer requirements, payment exceptions, and collection workloads increase.<\/p>\n<p><strong>Gia helps finance teams automate repetitive receivables work, prioritize collection activity, and improve visibility across the order-to-cash process.<\/strong><\/p>\n<p class=\"mb-0\"><a href=\"https:\/\/www.emagia.com\/products\/receivables-management-and-automation-software\/\">Explore Accounts Receivable Automation<\/a> <a class=\"btn btn2 btn-primary btn-sm\" data-toggle=\"modal\" data-target=\"#popup-form\" href=\"\/book-a-demo\/\">Book a Demo<\/a><\/p>\n<\/section>\n<section id=\"accounts-receivable-faq\">\n<h2>Frequently Asked Questions About Accounts Receivable<\/h2>\n<h3>What is an example of accounts receivable?<\/h3>\n<p>An example of accounts receivable is a company delivering products worth $10,000 and giving the customer 30 days to pay. Until the payment is collected, the $10,000 is recorded as accounts receivable.<\/p>\n<h3>Is accounts receivable an asset?<\/h3>\n<p>Yes. Accounts receivable is generally recorded as a current asset because it represents money the business expects to collect from customers.<\/p>\n<h3>What is the difference between accounts receivable and accounts payable?<\/h3>\n<p>Accounts receivable is money customers owe a business. Accounts payable is money a business owes suppliers, vendors, and other parties.<\/p>\n<h3>What happens when accounts receivable is paid?<\/h3>\n<p>When a customer pays an invoice, the payment is applied to the outstanding receivable. The accounts receivable balance decreases, and the business records the cash received.<\/p>\n<h3>Why is accounts receivable important?<\/h3>\n<p>Accounts receivable is important because it connects credit sales to cash flow. Slow collections can create cash-flow pressure even when sales and revenue are strong.<\/p>\n<h3>What are common accounts receivable examples?<\/h3>\n<p>Common accounts receivable examples include unpaid customer invoices from manufacturers, contractors, wholesalers, consulting firms, SaaS companies, healthcare providers, and other businesses that sell on credit.<\/p>\n<h3>What causes accounts receivable to increase?<\/h3>\n<p>Accounts receivable increases when a business makes a credit sale and invoices a customer before receiving payment. It can also increase when customers delay payment on existing invoices.<\/p>\n<h3>How can businesses reduce overdue accounts receivable?<\/h3>\n<p>Businesses can reduce overdue accounts receivable by invoicing quickly, maintaining accurate customer information, setting clear payment terms, sending consistent reminders, resolving disputes quickly, and prioritizing high-risk balances.<\/p>\n<\/section>\n<section id=\"accounts-receivable-summary\" class=\"bg-light-blue p-4 rounded-15 mb-3\">\n<h2 class=\"mt-0\">The Bottom Line<\/h2>\n<p><strong>Accounts receivable is money customers owe a business for goods or services already delivered on credit.<\/strong> Effective <a href=\"https:\/\/www.emagia.com\/blog\/why-accounts-receivable-management-is-moving-to-the-cloud\/\">accounts receivable management<\/a> helps businesses convert sales into cash by improving invoicing, payment tracking, collections, dispute resolution, and cash application.<\/p>\n<p>The strongest AR processes make it easier for customers to understand and pay invoices while giving finance teams clear visibility into payment risk, overdue balances, and expected cash flow.<\/p>\n<p class=\"mb-0\"><a class=\"btn btn2 btn-primary btn-sm\" href=\"https:\/\/www.emagia.com\/request-a-demo\/\"> Talk to Experts \u2192 <\/a><\/p>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Accounts receivable (AR) is money a business is owed by customers for goods or services already delivered on credit. For example, if a company sends a customer a $10,000 invoice due in 30 days, the $10,000 is recorded as accounts receivable until the customer pays. Common accounts receivable examples include: A manufacturer shipping products and &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/www.emagia.com\/blog\/accounts-receivable-examples\/\"> <span class=\"screen-reader-text\">Accounts Receivable Examples: Definition, Process &#038; Real-World Examples<\/span> Read More &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[204],"tags":[],"class_list":["post-9491","post","type-post","status-publish","format-standard","hentry","category-featured-reads"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.emagia.com\/blog\/wp-json\/wp\/v2\/posts\/9491","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.emagia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.emagia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.emagia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.emagia.com\/blog\/wp-json\/wp\/v2\/comments?post=9491"}],"version-history":[{"count":9,"href":"https:\/\/www.emagia.com\/blog\/wp-json\/wp\/v2\/posts\/9491\/revisions"}],"predecessor-version":[{"id":9494,"href":"https:\/\/www.emagia.com\/blog\/wp-json\/wp\/v2\/posts\/9491\/revisions\/9494"}],"wp:attachment":[{"href":"https:\/\/www.emagia.com\/blog\/wp-json\/wp\/v2\/media?parent=9491"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.emagia.com\/blog\/wp-json\/wp\/v2\/categories?post=9491"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.emagia.com\/blog\/wp-json\/wp\/v2\/tags?post=9491"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}