When it comes to tracking business finances, Accounts Payable (AP) and Accounts Receivable (AR) are two sides of the same coin. AP is the term used to describe money owed by a company or individual to external vendors, such as suppliers and contractors, for goods and services rendered. AR, on the other hand, is money owed to your company by customers for goods and services provided. In essence, AP is what you owe to others; AR is what others owe to you. Both play an important role in maintaining a healthy cash flow and ensuring vendors get paid on time.