- Liabilities Accounting
- Liabilities Examples
- Types of Liabilities on Balance Sheet
- Contingent Liabilities
- Contingent Liabilities Example
- Accounts Payable | Days Payable Outstanding | Formula |
- Accounts Payable Examples
- Accounts Payable Credit or Debit
- Accounts Payable Cycle
- Salary Payable
- Current Liabilities | List of Current Liabilities on Balance Sheet
- Current Liabilities Formula
- List of Current Liabilities
- Current Liabilities Examples
- Non Current Liabilities Examples
- List of Non-Current Liabilities Examples
- Accrued Liabilities
- Accrued Expenses vs Accounts Payable
- Accrued Expenses
- Accrued Interest Formula
- Accrued Interest
- Notes Payable
- Accounts Payable vs Notes Payable
- Revolving Credit Facilities
- Bonds Payable Accounting
- Amortization of Bond Premium
- Bad Debt Provision
- Bad Debt Reserve Allowance
- Deferred Expenses
- Deferred Tax Liabilities
- Unearned Revenue (Sales)
- Is Unearned Revenue a Liability?
- Deferred Revenue (Income)
- Revenue Expenditure
- Revenue Expenditure Examples
- Current Portion of Long-Term Debt (CPLTD) | Balance Sheet
- Short Term Loans
- Long-Term Debt in Balance Sheet
- Long-Term Liabilities Examples
- Book Value of Debt
- Leveraged Loans
- Financial Liabilities | Definition, Types, Ratios, Examples
- Financing Activities
- Long-Term Liabilities
- Liability vs Debt
- Accounts Receivable vs Accounts Payable
- Minority Interest
- Accounting for Convertibles
- Accounting for Derivatives
- Operating Lease
- Operating Lease Accounting
- Capital Lease
- Capital Lease Accounting
- Finance Lease
- Hire Purchase
- Equipment Lease
- Lessor vs Lessee
- Capital Lease Criteria
- Loan vs Lease
- Financial Lease vs Operating Lease
- Off balance Sheet Financing
- Finance vs Lease
- Bond vs Loan
- Triple Net Lease
- Credit Terms
- Debtor vs Creditor
- Accounting Basics (80+)
- Bookkeeping (52+)
- Balance Sheet (30+)
- Assets (109+)
- Shareholders Equity (91+)
- Income Statement (158+)
- Cash Flow Statement (17+)
- Accounting Careers (26+)
- Accounting Books (8+)
- Budgeting in Finance (31+)
The primary difference between Accounts Receivables vs Accounts Payable is that Account receivable is the amount which the company owes from the customer for selling its goods or for providing the services whereas accounts payable is the amount owed by the company to its supplier when any goods are purchased or services are availed.
Accounts Receivable vs Accounts payable Differences
In business, you need to purchase goods on credit and you also need to sell goods on credit. Since the business purchases and sells in bulk, it has to consider both credit purchase and credit sales.
- When you purchase on credit, you need to pay off a certain amount to your creditors. This amount that you owe as a business to your creditors is called accounts payable.
- On the other hand, when you sell on credit, you would receive a certain amount after some time from your debtors. This amount that you’re yet to receive is called accounts receivable.
Both of these are important for business because they both help a business know how much the business needs to pay off and how much the business would receive.
4.9 (1,067 ratings)
In this article, we will go through a comparative analysis between them.
Accounts Receivables vs Accounts Payable Infographics
There are many differences between accounts receivables vs accounts payables. Here are the top most differences –
Accounts Receivable vs Accounts Payable – Key differences
Here are the key differences between accounts receivable vs accounts payable –
- Accounts receivable means you have sold goods on credit and you are yet to receive money for the goods you sold off. Accounts payable on the other hand means that you have purchased raw materials/goods on credit and you’re yet to pay off the creditor.
- Accounts receivable is a current asset. Accounts payable is a current liability.
- Accounts receivable stems from credit sales. Accounts payable stems from credit purchases.
- In the case of accounts receivable, money needs to be collected. In the case of accounts payable, money needs to be paid.
- Accounts receivable ensure inflow of cash. Accounts payable ensures outflow of cash.
Accounts Receivable vs Accounts Payable (Comparison Table)
|Basis for Comparison – Accounts Receivable vs Accounts Payable||Accounts Receivables||Accounts Payables|
|1. Meaning||The money that the business is yet to receive from its debtors is called accounts receivables.||The money that the business is yet to pay off to its creditors is called accounts payables.|
|2. Cause||Money is due for selling of products on credit.||Money is due for purchasing raw materials on credit.|
|4. Result||Cash inflow.||Cash outflow.|
|5. Movement of money||Money to be collected.||Money to be paid.|
|6. Responsibility||Lies on debtors.||Lies on the business.|
|7. Comprises of||Debtors and Bills Receivables.||Creditors and Bills Payables.|
Accounts receivables and accounts payables are two sides of one coin. Every transaction if it’s done on credit has to have an element of accounts receivable and accounts payable in it. If Company A sells on credit to Company B, Company A will be a creditor to Company B and Company B would be a debtor to Company A. That means, in one transaction there are both – accounts receivables and accounts payables.
Understanding these two concepts is very important. Especially if you’re starting a business and you would do a lot of transactions on credit (or “on account”), it is important that you identify two sides of the same coin. Identifying accounts receivables and accounts payable will reduce a lot of headaches for the business upfront.
Video on Accounts Receivable vs Accounts Payable
This has a been a guide to the top differences between accounts receivables vs accounts payables. Here we also discuss accounts receivables and accounts payables differences with examples, infographics, and comparison table. You may also have a look at the following articles for gaining further knowledge in Accounting –
- Days Sales Uncollected | Components
- Top Differences Between Accrued Expenses vs Accounts Payable
- Top Differences Between Accounts Payable vs Notes Payable
- Creditor vs Debtor Differences
- Types of Account Receivables Factoring
- Days Sales Outstanding (DSO)
- Days Payable Outstanding (DPO)
- Working Capital Ratio
- Average Collection Period Formula