Guides · Bookkeeping
Receivables vs payables
Receivables are the money your customers owe you; payables are the money you owe your suppliers. A business's cash health lives in the gap between the two.
The two sides of the ledger
Accounts receivable is the total your buyers still owe on bills you have raised. Accounts payable is the total you still owe on bills your suppliers have raised. Both are promises of money — one coming in, one going out.
A business can be profitable on paper and still run short of cash if its receivables come in slower than its payables fall due. That is why both sides have to be watched together, not one at a time.
Why net position matters
Net position is receivables minus payables — what you are owed set against what you owe. Seeing it in one view tells you whether the business is a net lender or a net borrower this month, and how much room it has.
Without a combined view, a business tracks receivables in one place and payables in another and never quite sees the whole picture at once.
How Lekha shows both sides
Lekha is a two-sided ledger: receivables and payables shown side by side, with a net-position view so you always see what you owe against what you are owed.
Lekha records what your documents say and tracks the money on both sides — what you owe and what you are owed. It records and tracks; it does not replace your accountant.
Questions
- What is the difference between receivables and payables?
- Receivables are what customers owe you on bills you have raised. Payables are what you owe suppliers on bills they have raised.
- What is net position?
- Net position is receivables minus payables — what you are owed set against what you owe — shown in one view.
- Why track both together?
- Because a business's cash health lives in the gap between money coming in and money going out. Watching only one side hides that gap.