Accounts Payable and Receivable, two highly in-demand yet deceptively similar jobs. These jobs continue to be in high demand in 2022, thanks to renewed growth in the accounting sector following the rebound of COVID-19, according to a recent report by the Commonwealth Bank.
However, while both roles sound similar, they offer two different career paths. If you’re a finance professional, you may be asking yourself: of accounts payable vs. receivable, which is the better career path?
Accounts payable vs. receivable: what’s the difference?
First, however, let’s distinguish between the two. Within accounting, accounts payable refer to the money or assets your organisation owes a third party. This could be anything from office supplies like stationary to vendors who provide services to your employees. They are considered a liability, as this is money that will eventually be debited from the business.
Accounts receivable is the other side of that equation; they refer to the incoming money that is owed to your company for goods or services rendered. They are considered assets, as it is essentially the money coming into the organisation.
Both accounts payable vs. receivable are vital to the fiscal health of a company, and while smaller companies will often hire a single person to cover both functions, larger organisations prefer to keep the role separate. As accounts payable vs. receivable are both accounting roles, they typically sit within the financial services function of an organisation.
Accounts payable vs. receivable job descriptions
Specifically, the role of Accounts Payable involves completing payments and controlling expenses by processing, verifying and reconciling invoices. They provide financial, clerical and administrative support to their colleagues and organisation.
Major day-to-day tasks can include:
- Keeping track of all expenditures and payments including payroll, purchase orders, invoices, statements, etc.
- Reconciling processed work by verifying entries and comparing reports to balances
- Maintaining historical records and files
- Preparing analyses of accounts and producing monthly reports
- Continuing to improve processes and procedures.
This role typically requires good accounting and bookkeeping skills, as well as strong attention to detail and data entry skills. Furthermore, interpersonal skills are essential, as Accounts Payable typically work alongside their colleagues to keep track of invoices and purchase orders, thus requiring a high degree of communication and teamwork.
Related: Read through our Accounts Payable job description to learn more
Accounts Receivable, however, receives payments for goods and services rendered, and records these transactions accordingly. It is their responsibility to secure revenue by verifying and posting receipts and resolving discrepancies.
Key tasks might include:
- Generating invoices and account statements
- Performing account reconciliations
- Maintaining historical records and files
- Investigating and resolving irregularities and enquiries
- Maintaining billing system.
Like Accounts Payable, Accounts Receivable generally requires a high level of organisation and attention to detail. However, while Accounts Payable usually work more within the organisation, Accounts Receivable work closer with external vendors. As a representative for the company, they need to have good interpersonal and communication skills.
Related: Explore our Accounts Receivable job description for more
Accounts payable vs. receivable salary
With such similar roles, one might expect similar salaries, but our latest Salary Guide has shown this is not the case.
How much does an Accounts Payable earn?
Generally, the salary for Accounts Payable is determined by the number of years of experience, soft and technical skills, and the scale of responsibilities the role will maintain. However, on average, Accounts Payable can expect to earn between $52,000 and $120,000 per year.
How much does Accounts Receivable earn?
Though the salary for Accounts Receivable is also determined by many of the same factors, the average salary is between $80,000 and $125,000 per year.
For more information on Accounts Payable vs Receivable salaries, access our 2022 Salary Guide.
Can the same person do accounts payable and receivable?
Many smaller companies hire a single accountant to fulfil both functions, but this is not advisable for a number of reasons: lack of oversight can be risky, for example, and is an easy way to lose track of transactions or make mistakes.
At the very least, there should be two people involved in tracking payments and reviewing transactions to ensure due process, cross-checking for mistakes and verifying legitimate business dealings.
Are you looking for your next accounting career move? Explore our open roles now