Accounts receivable vs. accounts payable

Accounts receivable

• Any money your customers owe you for goods or services they purchased from you in the past. 
• This money is typically collected after a few weeks, and is recorded as an asset on your company’s balance sheet.
• Accounts receivable are classified as an asset because they provide value to your company. (In this case, in the form of a future cash payment.)

Accounts payable

• Accounts payable on the other hand are a liability account, representing money that you owe another business.