What is the difference between accounts receivable and accounts payable when we look at accounts?
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accountingbyte
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What is the difference between accounts receivable and accounts payable when we look at accounts?
In accounting accounts receivable vs payable, AR refers to money owed by customers for credit purchases and AP is used for money the company still has to pay to suppliers. AR is an asset that you own and AP is an amount you still have to pay. These two concepts both influence working capital and form the main basis of accrual accounting. Late AR negatively impacts cash flow for a company. Not paying AP on the agreed date may upset your suppliers and cost money through penalties. Both operations should be inspected closely to preserve the business’s health.
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