What are accounts receivable?
Accounts receivable (AR) is the money customers owe a business for goods or services delivered on credit: recorded as a current asset on the balance sheet under IFRS 9 and US GAAP (ASC 326). AR is the bridge between revenue recognition and cash collection: revenue books when performance obligations are met; cash arrives when the customer pays.
Key metrics
- Days Sales Outstanding (DSO): AR ÷ Daily Revenue × 365. Rising DSO signals slower collections or weaker customer health.
- Aging buckets: 0–30, 31–60, 61–90, 90+ days. The further out a balance ages, the more likely it becomes bad debt.
- AR turnover: Revenue ÷ Average AR. Higher turnover means faster cash conversion.
- Allowance for expected credit losses: the contra-asset that reduces gross AR to net realisable value under IFRS 9.
AR vs. related concepts
- AR vs. revenue: revenue is recognised; AR is the unpaid balance.
- AR vs. cash flow: high AR with low cash receipts signals working-capital strain.
- AR vs. notes receivable: notes have formal written promises with interest; AR is informal trade credit.
Why founders watch it
AR is real revenue that has not yet become cash. A company growing revenue 50% while AR grows 80% is silently bleeding cash into customer balance sheets. In due diligence, expect aging reports, customer concentration analysis and allowance methodology to be reviewed.
Turkish B2B SaaS Context
Turkish B2B customers commonly expect payment terms of 60-90 days, and annual inflation quickly erodes the real value of nominal AR. For SaaS businesses, an annual upfront subscription model (deferred revenue) eliminates AR risk and provides protection against currency and inflation movements.
Financing, Transaction and Collection Issues
Financing: assignment of receivables and factoring, where the distinction between recourse and non-recourse factoring has balance sheet and risk consequences. Anti-assignment clauses in customer contracts can lock up financing: companies planning invoice financing should weed out such clauses in the standard contracts of large customers before signing.
Transactions: in the working capital definition, receivables aging, the doubtful receivables allowance policy and concentration (the share of a single customer) are items of the price bridge. The warranty that receivables are collectible in the ordinary course is tested against the aging schedule.
Collection: the default interest regime (in commercial matters, by reference to the Central Bank of the Republic of Türkiye advance rate), formal notice and enforcement strategy, and the limits on collection communications under KVKK: disclosing the debt to third parties while putting pressure on the debtor is a classic violation.
Do: review the AR aging weekly; chase past-due balances aggressively; book allowances per IFRS 9 expected-credit-loss model.
Don’t: treat all AR as collectible cash: a single distressed enterprise customer can wipe out an SMB SaaS quarter.