ViaDerma Inc (VDRM)

[Mariner93]

Not quite - accounts receivable are products or services the company has to sold to another entity on credit. It means sales were made but payment for those sales has not been collected yet. In theory increasing AR means more sales but key metric is ensuring the company is collecting payment from customers within the agreed upon payment terms.

Accounts payable are goods or products that the company has purchased from another company on credit. This is just like your credit card balance - you got to take possession of the item you purchase but you still owe the $.

AR is generally good as it indicates you're selling your products but you have to actively manage your AR balance to make sure your customers pay you on time and don't abuse the credit you've extended.