Film Accounting Glossary
Accounts receivable
What is accounts receivable?
Also called AR.
Accounts receivable (AR) is money owed to the production company that has not yet been collected, such as a financier's funding installment, an unpaid tax credit claim, or a rebill to another production.
On a picture-car or equipment vendor's books, AR is the invoiced rental income still sitting with the production. Aging the receivable, tracking how many days past due each item is, is how a vendor decides when to stop extending credit.
Example
A picture-car vendor bills a production $32,000 and is paid 47 days later. For those 47 days the amount is AR on the vendor's books, and it is the vendor, not the production, funding the gap.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Mostly the vendor side of a rental, plus the production side for incentive claims and rebills. Tracked on an aging report grouped by 30, 60, and 90 days past due.
Common mistake
Not aging the receivable. Without a 30/60/90 view, a vendor cannot see that one production is quietly 80 days late until it is large enough to hurt.
Related questions
- What is an AR aging report?
- A list of unpaid invoices grouped by how far past due they are, usually 30, 60, and 90 days. It is how a vendor decides when to stop extending credit.
- Who actually funds slow payment on a rental?
- The vendor. Between invoice and payment, the vendor is financing the production's use of its fleet at no charge, which is why prompt payment is worth real money to them.