What does it mean to have a high AR balance?

ANSWER

Expert Michael Lim's Answer:

AR is a shortened version of the term "Accounts Receivable."  Accounts receivable are monies owed to a company by customers for goods or services provided, but not yet collected from them.

If you have a high accounts receivables balance, it means that you have a large sum of money that is owed to you by your customers.  If this amount has been outstanding for an inordinate amount of time (say 90 days), it may mean that you have a collection problem, and may have to seek other means of collecting from your customers.

Michael Lim, CPA

California

16 yrs experience

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128 Ans.