Trade receivables are assets that arise when a business provides goods or services on credit and customers owe the business money. This debt is referred to as an ‘accounts receivable’, and it must be collected from the customer.

Accounts receivables, on the other hand, refer to debts arising from funds received in advance for goods or services yet to be delivered. These types of receivables are typically paid off before trade receivables.

In order to maintain healthy cash flow, businesses need to have quick and efficient systems for managing these two types of receivables. Knowing the differences between them is essential, so don’t let yourself get tangled up in the details!