Trade receivables, also known as accounts receivable, are legally enforceable claims for payment held by a business for goods supplied or services rendered that customers have ordered but not paid for. They are the amounts owed to a business by its customers following the sale of products or services on credit. Trade receivables are generally in the form of invoices raised by a business and delivered to the customer for payment within an agreed time frame. They are shown in a balance sheet as an asset.

Trade receivables are all invoices for goods or services that have been delivered to customers or clients but haven’t yet been paid for. They are likely to be the largest asset on most businesses’ balance sheets, as they represent all the outstanding money owed to the business but is due soon. A company’s receivables may include both trade and non-trade receivables, with the latter including receivables which do not arise as a result of business sales, such as tax refunds or insurance payouts. Non-trade receivables are also typically recorded on the balance sheet as current assets.

Trade receivables are easy to calculate – they’re simply the total of all currently outstanding invoices sent to customers or clients. Some businesses might also be interested in regularly calculating their average trade receivables for a set timeframe, which can be done by adding together all the money due to the business and dividing it by the number of days in the timeframe.

In summary, trade receivables are the amounts owed to a business by its customers following the sale of products or services on credit. They are shown in a balance sheet as an asset and are generally in the form of invoices raised by a business and delivered to the customer for payment within an agreed time frame.