How are accounts payable and receivable different from each other in a business

[accounting byte]

accounts payable vs receivable Any sums a company owes its suppliers in the short run are recorded as accounts payable. They play a key role in preserving good ties with suppliers and handling flow of cash. The amounts in accounts receivable are important for a business, as they predict how much money the business will receive soon. AP sets out what a company has to pay, while AR shows the money that it will collect. Handling both in the right way helps your business maintain its cash flow and good financial health. Paying bills is what AP is for and receiving payments from clients or customers is what AR is all about.

[Author]

Posts