accounts receivable vs accounts payable are also critical in keeping a business with a working cash flow. AR shows the inflow of money by customers and is key to liquidity. AP is an outflown money to suppliers and it touches working capital. Effective AR processes enhance revenues collection, and AP effectively pays their vendors and keeps them in trust. AR helps to increase cash inflow whereas AP assists in regulating cash outflow. The equilibrium of the two would keep a business afloat and financially stable. A preference to one or the other may cause problems with cash flow or with the relationships.

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