Accounts receivable is money customers owe your business. Accounts payable is money your business owes suppliers. The distinction helps a team separate collection work from payment review, but neither total alone tells you how much cash is available in the bank.
Follow the direction of the obligation.
A customer invoice awaiting payment belongs in a receivables review. An unpaid supplier bill belongs in a payables review. Intuit’s account-type reference explains these as distinct account categories. The terminology is useful even when your organization uses a different accounting system.
Keep this distinction separate from decisions about when income or expenses should be recognized. Those depend on the accounting basis and the circumstances; confirm treatment with the person responsible for your accounts.
Why receivables minus payables is not cash in the bank.
Suppose a fictional service business has a customer invoice for ₱20,000 due next month and a supplier bill for ₱8,000 due this week. The two records answer different questions: when to follow up with the customer and which supplier obligation needs payment review.
Subtracting the bill from the invoice gives ₱12,000, but that number ignores settlement timing and other transactions. It is neither the bank balance nor a profit calculation. Review each obligation with its documents and compare cash questions with the appropriate reconciled records.
| Record | Meaning | Next review |
|---|---|---|
| Customer invoice: ₱20,000 | The customer owes the business; payment has not been established by the invoice alone. | Check terms, receipt status and any dispute. |
| Supplier bill: ₱8,000 | The business owes the supplier, subject to document and approval review. | Check the bill, due date and payment authorization. |
| Bank balance | A different record affected by receipts, payments and other transactions. | Use the relevant reconciled bank information. |
Review the document behind the balance.
For each item, identify the customer or supplier, document reference, dates, amount and payments or credits already applied. Check disputed items separately so that a list of open balances does not hide the reason an item remains open.
- Receivable: who owes the amount and which invoice supports it?
- Payable: which supplier and bill support the obligation?
- Has a payment or credit been recorded but not applied?
- Is there a dispute, duplicate or missing document?
- Who owns the next follow-up?
Use age to focus the next review.
An accounts receivable aging report groups open customer balances by age. It can help a team identify items needing follow-up, but an older balance still needs document and payment context. Age alone does not establish whether an amount is collectible.
Read our receivables aging guide for a step-by-step report review. Keep supplier due dates and payment approvals visible in a separate payables process.
Make the review repeatable.
Choose a regular review time and record the outcome of follow-ups. When closing a period, compare the detailed balances with the related accounting reports and investigate differences with your accountant. The month-end close checklist can help organize that handover.
Explore the FilWorx Ledger workflow for receivables, payables and reporting. Ask how your team would review source documents and open balances rather than assuming that a dashboard replaces accounting review.
Compare balances on the same basis.
Report receivables and payables separately at the same date and scope. Their difference is not a bank balance or a profit measure. Use reconciled source records before interpreting either total.
Keep the period, population and definitions consistent when comparing results. These are suggested measures, not industry benchmarks or observed FilWorx customer outcomes.
Sources & further reading.
Further reading from the original publishers. Product documentation describes that publisher’s product; it does not establish FilWorx capabilities.