What it means in practice
A receivable is not cash in the bank. Its usefulness depends on collection timing and collectability. Review due dates, disputes, missing documents and responsibility for follow up. An ageing view groups outstanding amounts by how long they have remained unpaid. Do not assume that every overdue account has the same cause or recovery prospect. Reconcile the list with the underlying records before relying on its total. Review the age and status of balances, not only the total. An invoice within agreed terms, a disputed invoice and an overdue invoice with a payment promise need different actions. Check whether the customer has the documents required to process payment. A growing receivable balance may reflect rising sales, weaker collection or both, and the explanation matters for cash planning.
A fictional worked example
A fictional business has invoiced ₦500,000 for completed work and is waiting for payment. That amount remains a receivable until settled or otherwise accounted for.
A useful question
Which overdue invoice is waiting on an action your own team can complete?
Read the practical guide