What is Unbilled AR and how do you calculate it?

Like deferred revenue, Unbilled AR (accrued revenue) is an essential element and concept of revenue recognition for subscription businesses.

Unbilled AR is an Asset account on the balance sheet that represents amounts recognized as revenue for which invoices have not yet been sent. This can occur when you invoice in arrears or have any delay in billing relative to the revenue recognition trigger date. It is also common with professional services fees paid in advance for work to be performed.

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