As sales occurs every customer is not able to pay the bills that's where A/R are occurs the goal of A/R is to maintain summarize & record all the transactions related to unpaid a/c or future collections or A/R.
Accounts Receivable is the part and parcel of working captail. The major working captial is locked in accounts receivable often than inventory. The goal of accounts receivable is to be collecting cash from debtors as quick as possible and helping management cycle. Cash is converted as raw materials wip and product overhead labour and debtors finally its once again converted as cash.To monitoring the credit period and inform the debtors for due dates.
