Explore commonly used personal finance terms.
Accounts payable represents a company’s short-term liabilities or money owed to suppliers for goods or services purchased on credit. Recorded as a current liability on the balance sheet, accounts payable are crucial for managing cash flow and ensuring liquidity. Businesses monitor accounts payable to track outstanding obligations, avoid late fees, and maintain strong vendor relationships. Efficiently managing accounts payable supports a company’s reputation and ensures operational continuity.
