Accounts Receivable (AR) refers to the money owed to your business by customers or clients for goods and services delivered. Efficient management of AR ensures timely payments, improves cash flow, and reduces the risk of bad debts.
Accounts Payable (AP), on the other hand, is the money your business owes to suppliers and vendors. Proper management of AP helps maintain good supplier relationships, avoid late fees, and optimize cash flow.
When handled professionally, AR and AP management provides clear visibility of your financial health and supports strategic decision-making.