Glossary
What is Accounts Payable?
Accounts payable is the money your business owes to suppliers and vendors for goods or services you have received but not yet paid for. It appears as a liability on your balance sheet. Lenders review accounts payable to understand your short-term obligations and how promptly you pay bills. A rising payable balance or many past-due bills can signal cash flow strain, while consistent on-time payment can support your business credit profile.
Example
A restaurant receives a food delivery on net 30 terms; the unpaid invoice sits in accounts payable until it is paid.
Related terms
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