Glossary

Accounts Receivable

Accounts Receivable is the QuickBooks account holding what your customers owe you for sales you have already recorded as revenue, and it exists only because the sale and the payment happened at different moments.

Also called: A/R, AR, receivables, trade debtors, money owed by customers

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Definition

Intuit puts it plainly: accounts receivable "are created when a customer purchases your goods or services but does not pay for them at the time of purchase." That gap between the sale and the cash is the entire reason the account exists.

So A/R is a promise, recorded as an asset. You did the work or shipped the goods, you recognized the revenue, and the money is still with the customer. The balance goes up when you raise an invoice and comes down when the payment lands against it.

The consequence people miss is the inverse. If the sale and the payment are always simultaneous, A/R never moves at all. A card charged at checkout leaves nothing outstanding, so there is nothing to record as owed. This is why two businesses with identical revenue can have completely different balance sheets: one invoices, one takes payment at the point of sale, and only the first one has receivables.

Key points

+The money customers owe you for sales already recorded as revenue. An asset, not income.
+It exists because the sale and the payment happened at different times.
+An invoice creates the receivable. A payment applied against that invoice clears it.
+A sales receipt never creates one: revenue and cash are recorded in the same document.
+A Stripe business can run for years with no A/R balance and acquire one the day it starts invoicing.
+A/R is about whether the customer still owes you. Where the money sits once they have paid is a separate question.

Which record you write decides whether A/R moves at all

This is the part that matters for a business running on Stripe, and it is structural rather than a preference.

A [sales receipt](/glossary/quickbooks-sales-receipt) records the revenue and the money in one document. Nothing is outstanding at any point, so the receivable is never created. Most card-at-checkout Stripe activity belongs here, which is why plenty of Stripe businesses have an A/R balance of exactly zero and no reason to think about this account.

An invoice is the opposite. Raising it recognizes the revenue and records the receivable at the same moment, and the balance sits there until a payment is applied against it. The day you turn on Stripe invoicing is the day A/R starts moving, and nothing about your revenue had to change for that to happen.

There is a third case worth knowing because it produces a balance that surprises people. A payment recorded against a customer without being applied to any invoice does not reduce a receivable, because there is no receivable to reduce. It sits as an unapplied credit on that customer, which shows up as a negative balance against their name rather than as revenue waiting to be collected.

How the balance clears

There are three honest ways a receivable leaves your books, and only one of them involves getting paid.

**The customer pays.** A [payment](/glossary/quickbooks-payment) is applied to the specific invoice it settles. The invoice closes, A/R drops by that amount, and the cash appears wherever your workflow puts it. The word doing the work is "applied": a payment that exists but is not linked to the invoice leaves the invoice open and the receivable outstanding, which is the single most common reason A/R disagrees with reality.

**You credit it.** A [credit memo](/glossary/quickbooks-credit-memo) reduces what the customer owes without any cash moving. Applied to an open invoice, it settles part or all of the balance the same way a payment would.

**You take it off.** Voiding an invoice removes the claim entirely, and marking one uncollectible acknowledges the money is not coming. Either way the receivable stops being an asset you are counting on. Our guide to [voiding versus marking uncollectible](/blog/stripe-void-uncollectible-invoice-quickbooks) covers which one to reach for, because they are not interchangeable.

One QuickBooks preference sits underneath all of this. QuickBooks can apply credits and payments to open invoices automatically, or it can leave them sitting unapplied for you to link by hand. If that preference is off, you can be looking at a correct invoice, a correct payment, and an A/R balance insisting the customer still owes you.

What sits next to A/R and is not A/R

Two balances get confused with receivables often enough to be worth separating.

**A customer credit balance** is money you owe the customer, or credit they hold against future invoices. It moves in the opposite direction from a receivable and lives on the customer rather than on any single invoice. Our post on the [Stripe customer balance](/blog/stripe-customer-balance-quickbooks) covers how that interacts with what an invoice is raised at.

**Your [holding account](/glossary/holding-account)** is where money sits after the customer has paid but before it reaches your bank. That is a cash question. A/R is a "does the customer still owe us" question. A receivable clears the moment the payment is applied, regardless of whether the cash has left Stripe yet, so the two balances answer different questions and should never be reconciled against each other.

How Acodei moves Accounts Receivable

Whether Acodei touches A/R at all comes down to which QuickBooks record a Stripe charge becomes, and that routing is decided by your account settings rather than by whether the charge happens to have an invoice attached.

**The paths that never create a receivable.** By default a successful Stripe charge becomes a Sales Receipt, which records the revenue and the money together and leaves A/R alone. On a connection configured to book sales as payments, a charge instead becomes a standalone Payment against the customer that is not linked to an invoice. Accounts on daily summary get no per-charge record at all, since their charges are aggregated into one receipt per day.

**The path that does.** With Invoice Sync enabled, a finalized Stripe invoice becomes a QuickBooks Invoice reproducing the line items and tax lines your mapping settings allow, which is the moment the receivable is created. When that invoice is paid, whether by a successful charge, a manual payment, or a credit balance offset, Acodei writes a Payment Receipt or a Credit Memo and applies it to the invoice already there. Acodei's own guidance is to keep QuickBooks' automatic application turned on so those payments and credit memos settle their invoices rather than sitting unapplied.

**What changes the size of the receivable.** If a Stripe customer balance reduced what was actually charged, Acodei by default includes that applied balance as a line item so the QuickBooks invoice matches what Stripe charged. An admin setting reverses this and creates the invoice at the full gross amount instead, so A/R carries the full value of the sale. Stripe fees are never added to invoices, which would break the totals; they are handled as expenses or on the deposit instead.

**What is checked, and when.** When Acodei records a payment against an invoice it verifies that the correct amount was applied and that the payment is linked to the correct QuickBooks invoice. A separate check compares the finished QuickBooks invoice to the Stripe invoice amount exactly, and that one applies only when tax is enabled.

**Later events that move the balance back.** A voided Stripe invoice is voided in QuickBooks or turned into a Credit Memo, with any attached credit notes removed first. An invoice marked uncollectible is handled the same way, and if it is later paid after all, Acodei reopens it and processes the payment. A Stripe credit note becomes a Credit Memo, linked to the invoice where possible and posted to the customer otherwise.

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Frequently asked questions

What is accounts receivable in QuickBooks?

It is the account holding what customers owe you for sales you have already recorded as revenue. Intuit describes receivables as being created when a customer buys goods or services but does not pay at the time of purchase. Raising an invoice increases the balance, and applying a payment against that invoice reduces it.

Do Stripe payments create accounts receivable?

Usually not. A card charged at checkout is paid at the moment of sale, so it is recorded as a sales receipt with the revenue and the cash in one document and no receivable is created. A/R only becomes involved when you invoice a customer and collect later, which is why many Stripe businesses have no A/R balance at all until they start using Stripe invoicing.

Why is my accounts receivable balance too high?

The usual cause is payments that exist but were never applied to their invoices, which leaves the invoices open even though the money arrived. QuickBooks has a preference that applies credits and payments to open invoices automatically; with it switched off, payments sit unapplied and A/R keeps showing balances that have in fact been settled. Voided or uncollectible invoices that were never processed will do the same.

What is the difference between accounts receivable and my holding account?

They answer different questions. A/R tracks whether the customer still owes you, and it clears when the payment is applied to the invoice. The holding account tracks where the money sits between the customer paying and your bank receiving it. A receivable can be cleared while the cash is still with Stripe, so the two balances are not meant to agree and should not be reconciled against each other.

Does a credit memo reduce accounts receivable?

Yes. A credit memo reduces what a customer owes without any cash moving, and when it is applied to an open invoice it settles part or all of that balance exactly as a payment would. If QuickBooks is not set to apply credits automatically, the credit memo sits unapplied on the customer instead and the invoice stays open.

What happens to A/R when a Stripe invoice is voided or marked uncollectible?

Either way the receivable comes off the books. Acodei voids the invoice in QuickBooks or creates a Credit Memo, removing any attached credit notes first. An invoice marked uncollectible is handled the same way as a void, and if that invoice is later paid after all, Acodei reopens it and processes the payment.

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