Accounts payable

Definition

Accounts payable is the money a business owes its suppliers for goods and services bought on credit but not yet paid. It appears as a current liability, also called trade creditors.

In plain terms

It is your unpaid supplier bills. Buying on credit and paying later is normal trade credit — accounts payable is the running total you still owe.

Why it matters for your company

Managing accounts payable — paying on time but not early — is a lever on working capital. Stretching supplier terms sensibly frees cash; abusing them damages relationships. See creditor days for the timing measure.