Accounts Receivable

Accounts Receivable is a Balance Sheet item that represents bills sent to customers for services already rendered. This is different than Deferred Revenue.

Example

You sell a customer $200 worth of flowers. They customer says thanks, takes the flowers and promises that they will pay later. Now your Accounts Receivable balance increases by $200.

On the other hand, deferred revenue would look like this:

You promise a customer you will get them $200 worth of flowers in 2 months. They pay you the $200 and say thanks. Now, this doesn’t affect Accounts Receivable since you have the money. But, since the services (providing the flowers) hasn’t been rendered yet, it increases Deferred Revenue by $200.