What is the comparison between accounts payable and receivable?

Accounts payable vs. receivable highlights the contrast between money owed and money to be collected. Accounts payable refers to the company’s short-term debts to vendors and suppliers. It’s a liability that reflects outgoing funds. Accounts receivable, on the other hand, is the amount clients owe the business. It’s an asset and reflects expected income. A healthy balance between AP and AR helps ensure that the business maintains positive cash flow and doesn’t run into liquidity issues.

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