Accounts Receivable

Accounts receivable, are treated as cash for Zakat purposes and therefore subject to Zakat, but the trader is only obliged to pay the Zakat on the account receivable in the year in which the account receivable is actually paid. In such a case, the Zakat must be paid not only for the year in which the account receivable was paid but also for each preceding year in which the account receivable was owing. In order to avoid practical problems in calculating the Zakat particularly in the case of traders who carry large account receivables, it is desirable that Zakat be paid each year on the total value of the account receivables. If a bad debt has been recovered and Zakat has not been paid thereon, then Zakat must be paid for the preceding years as well. 

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