Is Accounts Receivable an Asset? A Guide for Construction Business Owners

As a construction owner, knowing if accounts receivable are an asset or a liability can make a huge difference. It is the difference between accurately reporting your finances and watching your business grow or getting it all wrong and struggling to get your hands on the cash you need. Not to mention, misclassifying AR can make it harder for your business to make informed decisions.

But fear not! In this blog post, we're going to dive into the importance of identifying accounts receivable as an asset. We'll also answer some of the most frequently asked questions about A/R, so you can stay ahead of the curve. So buckle up and get ready for a financial ride!

Is Accounts Receivable Asset or Liability?

What is Accounts Receivable in Construction?

Accounts receivable refers to money that is owed to your business for services that you have provided to clients. It is basically the amount of money your business should receive from your clients.

This can include invoices for completed projects or payments for work in progress in the construction industry.

What are the Key Differences Between Assets and Liabilities?

Assets and liabilities are two important concepts in construction accounting. What are assets? Assets are resources that a business owns and that can be used to generate revenue. Liabilities, on the other hand, are debts or obligations that a business owes to others.

Asset	Liability