Accounts Receivable
Also known as: AR · outstanding invoices · unpaid invoices
Definition
Accounts receivable (AR) is money owed to you by clients for work already completed but not yet paid. For freelancers, it's the total of all outstanding (unpaid) invoices at any given time.
Detailed Explanation
AR is a critical number for freelancers because it represents work you've already done but haven't been paid for. High AR means you're effectively lending money to your clients interest-free. Freelancers should monitor AR weekly — chasing late payments early prevents small amounts from becoming bad debts. AI bookkeeping tools track AR automatically: which invoices are outstanding, how many days overdue each one is, and which clients consistently pay late. Automated payment reminders can escalate from friendly to firm without you having to write a single awkward email.
Freelancer Example
A freelance designer has completed work for 5 clients this month. 3 have paid ($3,500 total), 2 invoices are still outstanding ($2,200 total). Their AR is $2,200. They send polite reminders to the two outstanding clients and receive payment within 3 days.