Glossary · product

Receivable

Also called account receivable, AR, trade receivable, invoice.

Money a customer owes for goods delivered or services already performed - the asset that factoring buys and asset-based lending advances against.

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

What it means

It becomes a receivable when performance is complete and the invoice is issued, not when the order is placed. That timing distinction is the reason purchase order financing exists as a separate product: before delivery there is no receivable to finance.

Funders divide receivables into eligible and ineligible. Common exclusions in a borrowing base or factoring facility:

  • Invoices aged beyond a stated number of days past due
  • Amounts from any single customer above a concentration limit
  • Government, foreign and related-party accounts, unless separately approved
  • Contra accounts, where the customer is also your supplier and can set off
  • Progress billings, deposits, consignment and anything billed before performance
  • Credit balances, disputed items and anything subject to an offset

What proves a receivable is the documentation trail: the purchase order or contract, proof of delivery or signed timesheets, and the invoice itself. Factors verify a sample of these, and sometimes all of them.

Where this one catches people

Pre-billing - invoicing before the work is done to raise availability - is the fastest way to lose a facility. It is a breach of the eligibility warranties, it is a repurchase event, and because the client certified each invoice as representing completed performance, it is treated as fraud rather than as an accounting timing difference.

Where you will meet this term

Invoice Financing Payroll Financing Asset-Based Lending

Read next

Advance rateThe share of an asset's eligible value a funder will put up front, used in factoring, asset-based lending and… Borrowing baseThe pool of eligible collateral, each class multiplied by its own advance rate and reduced by reserves, that … Invoice factoringSelling receivables to a third party at a discount for immediate cash, with the buyer taking over collection … Mechanic's lienA statutory claim against real property filed by a contractor or supplier who was not paid, which can outrank… Net 30Trade credit terms giving a customer thirty days from the invoice date to pay in full, with net 15, net 60 an… Notice of assignment (NOA)The written notice telling a customer that its invoices have been assigned to a factor and that payment must … ObligorWhoever owes money under a given instrument - which, depending on which document you are reading, may be the … Purchase order financing (PO financing)Funding that pays a supplier to produce or ship goods against a confirmed customer purchase order, repaid whe… RepurchaseThe client's obligation to buy an invoice back from the factor when it turns out to be disputed, ineligible, … RetainageA percentage of each construction progress payment withheld by the owner or general contractor until the proj…

Receivable — common questions

What does receivable mean?

Money a customer owes for goods delivered or services already performed - the asset that factoring buys and asset-based lending advances against.

Where does receivable catch people out?

Pre-billing - invoicing before the work is done to raise availability - is the fastest way to lose a facility. It is a breach of the eligibility warranties, it is a repurchase event, and because the client certified each invoice as representing completed performance, it is treated as fraud rather than as an accounting timing difference.

Is receivable the same as an interest rate?

Receivable is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.

Which products does receivable apply to?

Invoice Financing, Payroll Financing, Asset-Based Lending.

Is there a worked example of receivable?

Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.

What else should I read alongside receivable?

Advance rate, Borrowing base, Invoice factoring, Mechanic's lien, Net 30.

Has this definition been checked?

Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.

Is this legal advice?

No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.

Can I suggest a term?

Yes — [email protected]. The glossary grows from what people are actually shown in contracts.