Actual outstanding balance

The actual outstanding balance is the sum of all of a customer’s outstanding invoices—whether past due or not—after accounting for payments and credit memos already received.

Example

A customer owes €20,000 in invoices. The customer has a credit balance of €2,000 and has made a partial payment of €3,000. The customer’s actual outstanding balance is €15,000.

Why It’s Important

This is the actual amount at risk for a customer. Comparing it to the customer’s credit limit helps determine whether we can still ship goods to them.

To learn more: Everything you need to know about accounts receivable.

See also: accounts receivable, credit limit, account reconciliation.