Unbilled Receivables are a category of current assets recorded on the balance sheet. They represent revenue that has been earned for the delivery of goods or services, but the invoicing process to the customer has not yet been completed. This can occur, for example, in service agreements where milestones or key activities are completed as part of the contract but have yet to be invoiced. For instance, if a consulting firm completes a significant project milestone that earns a revenue of $10,000, this amount might be recorded as an unbilled receivable until the invoice is issued. Unbilled Receivables are crucial for accurate and timely revenue recognition as they ensure that earned revenue is recorded in the corresponding period when the performance obligation is satisfied. Timely monitoring and management of unbilled receivables can help businesses understand revenue patterns and cash flow related to invoicing. It is important to differentiate unbilled receivables from accounts receivable, as the latter pertains to invoices that have already been issued. To summarize, unbilled receivables are an interim asset that bridges the gap between revenue recognition and invoicing, ensuring financial statements accurately reflect a company’s operations.