trade receivables

Trade receivables are amounts owed to a business by its customers for goods or services that the business has provided but has not yet been paid for. Essentially, when a company sells something on credit, it records this as trade receivables. These receivables are important for managing cash flow, as they represent future cash inflows. If customers pay their debts on time, the business can use that money to support its operations and growth. Proper management of trade receivables is crucial for maintaining financial health and stability.