Accounts receivable/payable

Accounts receivable refers to money that a company expects to receive from customers who have purchased goods or services on credit. It represents sales made but not yet paid for. Conversely, accounts payable refers to money that a company owes to suppliers for goods or services it has received but hasn't yet paid for. Both are essential for managing cash flow: healthy accounts receivable indicate strong sales, while manageable accounts payable ensure that a business can keep operating smoothly without cash shortages. Keeping track of these accounts helps businesses maintain financial stability.