Accounts receivable (AR) is the money customers owe a business for goods or services already delivered and invoiced on credit. It is a current asset until the customer pays. Kept by hand, it drifts: a TDS deduction left on the customer’s ledger looks unpaid, and your team chases money already paid to the government.
In OneFinOps, the Collections Agent applies each receipt to its invoices the day it lands.
Key takeaways
- AR is a current asset, shown as trade receivables in Indian accounts.
- One invoice can create a receivable, output GST payable and TDS receivable.
- Leaving TDS on the customer ledger inflates receivables and distorts DSO.
Accounts receivable vs accounts payable
AR is a current asset because it is a right to receive cash within the operating cycle. Your receivable is your customer’s payable.
| Point | Accounts receivable (AR) | Accounts payable (AP) |
|---|---|---|
| What it is | Money customers owe you | Money you owe suppliers |
| Balance sheet | Current asset (trade receivables) | Current liability (trade payables) |
| Normal balance | Debit | Credit |
| Key metric | Days sales outstanding (DSO) | Days payable outstanding (DPO) |
Accounts receivable journal entry with GST and TDS
Sharma Consulting Pvt Ltd (Maharashtra) bills a Mumbai client ₹2,00,000 plus 18% GST (9% CGST, 9% SGST) on 5 September 2026. The client deducts 10% TDS on the fee excluding GST (CBDT Circular 23/2017; section 194J of the Income-tax Act, 1961, now section 393 of the Income-tax Act, 2025) and pays ₹2,16,000 on 3 October.
- 5 September: Dr Client ₹2,36,000; Cr Professional fees ₹2,00,000, Output CGST ₹18,000, Output SGST ₹18,000.
- 3 October: Dr Bank ₹2,16,000, Dr TDS receivable ₹20,000; Cr Client ₹2,36,000.
- The ₹20,000 waits in TDS receivable until matched to Form 26AS (Form 168 for tax year 2026-27) or AIS.
How does the accounts receivable process work?
AR is the finance half of the order to cash process:
- Onboard the customer: PAN, GSTIN, place of supply, TDS status.
- Set terms and a credit limit.
- Invoice with the rule 46 particulars; e-invoice with an IRN above ₹5 crore aggregate turnover in any year from 2017-18.
- Follow up before, on and after the due date (dunning).
- Apply cash to invoices, recording TDS, short payments and bank charges.
- Reconcile and report: match TDS to Form 26AS or AIS, review aging and DSO, set provisions.
How OneFinOps handles accounts receivable
The Collections Agent reads each remittance advice and matches the receipt to open invoices by reference and amount. A short payment is split, the balance opens as a deduction case, and the chase on that amount pauses. It ranks what is still open by cash at risk and chases each promise to pay on its date.
Judgment calls go to people: a customer over its credit limit goes to the credit controller with the exposure shown.
Accounting software that only records the invoice and receipt leaves this matching to your team. Here the order, invoice, receipt and dispute sit in one record.
See how the Collections Agent works
