How is accounts receivable different from payable in financial management?
Quote from maria Mehra on May 21, 2025, 12:08 pmAccounts receivable is the money a business expects to receive from customers, reflecting income yet to be collected. It's an asset that contributes to future cash inflow. Accounts payable, however, is the amount the company owes others, such as vendors, and is recorded as a liability. Managing receivables ensures timely cash inflow, while payables management ensures the business pays bills on time without damaging supplier relationships or incurring late fees.
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Accounts receivable is the money a business expects to receive from customers, reflecting income yet to be collected. It's an asset that contributes to future cash inflow. Accounts payable, however, is the amount the company owes others, such as vendors, and is recorded as a liability. Managing receivables ensures timely cash inflow, while payables management ensures the business pays bills on time without damaging supplier relationships or incurring late fees.
Visit us: https://accountingbyte.com/accounts-payable-vs-accounts-receivable/