Managing working capital is a constant challenge—especially when customers take weeks or even months to pay. That’s why it’s important for finance teams to understand bills receivable vs bills payable, and how accounts receivable financing can be used to keep cash flowing.
What Is Bills Receivable vs Bills Payable?
Bills receivable refer to amounts owed to your business by customers. These are typically formalised through promissory notes or bills of exchange, where your customer commits to paying a set amount on a specific date. Once accepted, these documents then become part of your accounts receivable.
On the flip side, bills payable represent what your business owes to suppliers or creditors. Like bills receivable, they are usually documented obligations due at a later date and are recorded in your accounts payable ledger.
Tracking both correctly is critical. If bills receivable are delayed or missed, you may run short on cash. If bills payable are forgotten, you risk supplier relationships or late payment penalties.
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What Is Accounts Receivable Financing?
This is where accounts receivable financing (also known as receivable financing) comes into play.
Receivable financing allows businesses to receive cash upfront by using their outstanding invoices as collateral. There are two main types:
- Factoring – Selling your invoices to a third-party finance provider at a discount.
- Invoice discounting – Borrowing money based on the value of unpaid invoices, which you repay once customers settle their debts.
This can help bridge the gap between issuing an invoice and actually receiving payment—giving you the flexibility to invest in growth, pay staff, or meet supplier deadlines.
Why This Matters for Finance Teams
Cash flow issues are one of the top reasons businesses struggle—even when they’re profitable on paper. Delays in collecting bills receivable slow down operations, reduce agility, and can even force businesses to take on unnecessary debt.
Meanwhile, failing to keep track of bills payable can lead to payment errors, strained supplier relationships, and penalties.
By integrating receivable financing into your working capital strategy, you can reduce risk, strengthen financial forecasting, and free up funds when they’re needed most.
At B2BE, our automated accounts receivable 和 accounts payable solutions help you manage all of this in one place. Contact us to find out more.
About B2BE
B2BE delivers electronic supply chain solutions globally, helping organisations to better manage their supply chain processes, providing greater levels of visibility, auditability and control. We’re driven by a passion for what we do, inspired by innovation, and underpinned by a wealth of knowledge. With over 20+ years of experience, the B2BE teams operate worldwide.
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