What are the differences between accounts receivable and accounts payable?

accounts receivable vs accounts payable Accounts receivable (AR) is a record of the credit a company gives to its clients. The future cash expected by the business is recorded and denoted as an asset. What the company owes to others is shown by the accounts payable or liability part of the financial statement. After AR raises income and liquidity, the timing of AP needs attention so that there are no shortages of cash. You should aim to take in accounts receivable fast but pay accounts payable wisely to make sure your cash is balanced and remains healthy. In combination, they are an important part of managing working capital.