Independent editorial resource. Not affiliated with any employer or professional body. Occupational data from the U.S. Bureau of Labor Statistics Occupational Outlook Handbook (2024–25 edition). Wages are U.S. national figures as of May 2023.
Accounts payable (AP) and accounts receivable (AR) are both essential accounting functions, but they involve different workflows, skill sets, and career trajectories. Understanding both helps you figure out where to start and where each path leads.
What accounts payable does
Accounts payable manages money the company owes to vendors and suppliers. Core tasks include:
- Receiving and processing vendor invoices
- Matching invoices to purchase orders and receiving documents (three-way match)
- Obtaining proper approvals before payment
- Processing payments (checks, ACH, wire transfers)
- Reconciling vendor statements
- Managing vendor master records
- Ensuring expenses are coded to the correct accounts
AP work requires attention to detail, familiarity with procurement workflows, and understanding of expense categorization under GAAP.
What accounts receivable does
Accounts receivable manages money owed to the company by customers. Core tasks include:
- Generating and sending customer invoices
- Applying cash receipts and payments to open invoices
- Following up on past-due accounts (collections)
- Managing credit limits and credit terms
- Reconciling the AR sub-ledger to the general ledger
- Processing credit memos and adjustments
- Preparing aging reports for management
AR work requires communication skills (customer contact is involved), comfort with collections conversations, and the ability to investigate cash application discrepancies.
Compensation
Both AP and AR specialists fall under the BLS category of bookkeeping, accounting, and auditing clerks (SOC 43-3031), which had a national median annual wage of $47,440 as of May 2023. More experienced or supervisory AP/AR professionals may fall under accountants and auditors (SOC 13-2011), median $79,880. The actual range depends heavily on company size, industry, and level of responsibility.
Career paths from AP and AR
Both functions serve as legitimate entry points into accounting, and both can lead to similar destinations:
| Starting in AP | Starting in AR |
|---|---|
| AP Specialist → AP Supervisor → AP Manager → Accounting Manager → Controller | AR Specialist → AR Supervisor → AR Manager → Accounting Manager → Controller |
| AP background is common in cost accounting, treasury, and payment operations | AR background is common in credit management, revenue accounting, and billing |
Moving from AP or AR into staff accountant roles is possible with a bachelor’s degree in accounting. Some professionals use AP/AR experience as a bridge while completing their degree or CPA requirements.
Which is easier to break into?
AP roles often have slightly lower barriers to entry — the three-way match process can be learned on the job, and some employers are willing to train candidates without a degree. AR roles that involve significant collections work require interpersonal skills that are harder to train. That said, both are accessible entry-level positions in accounting.
Frequently asked questions
Is AP or AR more stressful?
Both can be stressful in different ways. AP gets stressful at month-end and year-end when invoices pile up and payment runs are critical. AR gets stressful when collections calls are needed and when customers dispute invoices. Neither is objectively more stressful — it depends on the company and the volume.
Do AP and AR skills transfer to full-cycle accounting?
Yes, but incompletely. AP and AR are sub-ledger functions. Full-cycle accounting also involves general ledger management, accruals, depreciation, and financial reporting. AP/AR experience gives you a foundation, but you will need additional exposure to advance into staff accountant roles at companies that expect broader coverage.
What software do AP and AR professionals use?
ERP systems such as SAP, Oracle, NetSuite, QuickBooks, and Sage are the most common. Many companies also use specialized AP automation tools (Tipalti, Bill.com, Coupa) or AR platforms (Invoiced, YayPay, HighRadius). Excel proficiency is expected in all cases.
Can you move between AP and AR?
Yes. The underlying accounting concepts overlap significantly. Professionals who have worked both sides are often valuable because they understand how the two functions interact — a payment made in AP corresponds to a receipt applied in AR at the counterpart company.