What is Accounts Payable and receivable?

The sum of money owed by a company to its vendors and suppliers for goods and services obtained on credit is referred to as accounts payable. It appears as a liability on the balance sheet and shows the company’s current liabilities. To keep excellent connections with suppliers, the accounts payable department organizes invoices, keeps track of deadlines, and makes sure payments are made on time.

Contrarily, accounts receivable refers to the sum of money that customers owe a business for products and services that were provided on credit. It is listed as an asset on the balance sheet and represents the company’s short-term assets. To maximise cash flow and preserve a sound financial position, the accounts receivable team keeps track of customer payments, sends bills, and follows up on past-due payments.