Net Accounts Receivable = Gross Receivables − Allowance for Doubtful Accounts
Receivables are sales made on credit that customers haven't paid yet.
What it is
Accounts receivable is the total owed to a company by customers who bought on credit. It is a current asset on the balance sheet, usually shown net of an allowance for amounts not expected to be collected. It represents sales already booked as revenue but not yet turned into cash.
Why it matters
Receivables tie up cash and carry collection risk, so their size and quality affect liquidity and earnings reliability. Receivables growing faster than sales can signal aggressive revenue recognition or customers who are slow or unable to pay. Tracking them helps you judge how real the reported revenue is.
How it's calculated
It is the gross amount owed by credit customers minus an allowance for doubtful accounts; its efficiency is often measured with days sales outstanding, which is receivables divided by revenue, times the number of days.
How Quintarthai uses it
Accounts receivable appears under current assets on the Financials tab of a company page, where you can compare its growth against revenue to spot collection or recognition concerns.
Cross-border note. Both US GAAP (CECL expected-loss model under ASC 326) and IFRS 9 require an allowance based on expected credit losses, so receivables are reported net of that reserve for Canadian and US filers, though the loss-estimation models differ in detail.
FAQ
What is the allowance for doubtful accounts?
It is an estimate of receivables the company expects not to collect, deducted from gross receivables to show a realistic net figure. A rising allowance can signal weakening customer credit quality.
Why watch receivables versus revenue?
If receivables grow much faster than revenue, customers are taking longer to pay or sales were booked before cash is likely to arrive, which can flag liquidity strain or overstated revenue.
Check your understanding
Over a year, a company's accounts receivable grow 40% while its revenue grows only 5%. Why might this concern an analyst?
Receivables outpacing revenue suggests slower collections or aggressive revenue recognition, which can signal liquidity strain or revenue that may not convert to cash.