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Accounts Payable vs Accounts Receivable
Feature	Accounts Payable	Accounts Receivable
Definition	The amount a company owes to its suppliers for goods or services received on credit.	The amount a company is entitled to receive from its customers for goods or services sold on credit.
Type of Account	Liability account.	Asset account.
Nature	Represents obligations or short-term debts.	Represents incoming funds or expected payments.
Balance Sheet Appearance	Shown under current liabilities.	Shown under current assets.
Cash Flow Impact	Cash outflow when payments are made to vendors.	Cash inflow when customers pay their dues.
Involved Parties	Company and its suppliers/vendors.	Company and its customers/clients.
Recording	Recorded when a bill is received from a supplier.	Recorded when an invoice is issued to a customer.
Management Goal	Ensure timely payments to avoid penalties and maintain good supplier relations.	Ensure timely collections to maintain cash flow and working capital.
Risk	Risk of late payments or defaulting on dues.	Risk of bad debts or non-payment by customers.
Example	A business owes ₹1,00,000 to a supplier for raw materials purchased on credit.	A business expects to receive ₹1,50,000 from a client for services rendered.
Affects Working Capital?	Yes, increases liabilities and affects net working capital.	Yes, increases assets and boosts net working capital.
Monitoring Tool	Accounts Payable Aging Report.	Accounts Receivable Aging Report.
Impact on Creditworthiness	Delayed payments can hurt supplier trust and credit score.	Delayed collections can signal poor financial management.