Accounts receivable (often called sundry debtors in India) is the total your customers owe you for credit sales not yet collected. It is an asset on the balance sheet and a key driver of working capital — money tied up in receivables is cash you cannot yet use.
Receivables ageing — grouping outstanding amounts by how overdue they are — helps prioritise collections before they turn into bad debts.
In double-entry terms, every credit sale debits the customer's account and credits sales, and every receipt reverses part of that balance. The discipline that makes receivables reliable is knock-off: matching each receipt against specific invoices rather than lumping it on account. Without invoice-level matching, the ageing report loses meaning, because the system cannot tell whether the amount outstanding is last week's bill or last year's.
Ageing buckets make the position concrete. Suppose a customer owes ₹1,00,000: ₹40,000 billed this month, ₹35,000 between thirty-one and sixty days old, and ₹25,000 past ninety days. The ₹25,000 deserves the first phone call, since the likelihood of recovery falls as debts age. Many firms also track debtor days — receivables divided by credit sales, multiplied by days in the period — to see whether collections are speeding up or slowing down.
Indian credit culture adds its own wrinkles. Udhaar runs on relationships, so written credit terms are often missing and disputes surface only at recovery time. Business customers deduct TDS before paying, leaving small unmatched balances that clutter the ledger unless the deduction is knocked off separately. And GST already paid on an invoice is generally not recoverable merely because the customer defaults, which makes early follow-up cheaper than late write-offs.