Receivables refer to the amounts of money that a business is owed by its customers for goods or services provided on credit. This financial asset represents a claim for payment and is recorded on the balance sheet as a current asset, as it is expected to be collected within a year. Businesses often manage their receivables carefully to ensure they receive payments on time. Effective management can improve cash flow and reduce the risk of bad debts, which occur when customers fail to pay. Common types of receivables include accounts receivable and notes receivable.