Definition

Noun 1. A debt owed by a business for goods or services purchased on credit: An "account payable" is a specific type of liability recorded in a company's accounting books. It represents a short-term debt or an obligation to pay a supplier for items bought or services received where payment has not yet been made. These are considered current liabilities because they are typically due within a short period, such as 30, 60, or 90 days.

Usage Examples

• Noun:
  • The company's balance sheet shows a significant increase in accounts payable this quarter.
  • Before closing the books, the accountant must review all accounts payable to ensure they are accurate.
  • An invoice from an office supply store creates an account payable for the business.

Advanced Usage

• "Accounts Payable" (AP) as a department/function: In business operations, "Accounts Payable" (often capitalized) refers to the department or the financial process responsible for paying the company's suppliers and bills.
  • She works in the Accounts Payable department, processing vendor invoices.
• "Aging of accounts payable": A report that categorizes unpaid supplier invoices by their due date (e.g., current, 30 days past due, 60 days past due), used to manage cash flow.
  • The aging of accounts payable report indicated several overdue invoices.

Variants and Related Words

• Payable (Adjective): Describing an amount that is due to be paid.
  • The invoice is payable within 30 days of receipt.
• Trade Payable: A more specific term for an account payable arising from the purchase of physical goods (inventory) from a supplier.
• Account Receivable (Noun): The opposite concept; it is money owed a business by its customers for goods or services sold on credit.

Synonyms

• Liability (in an accounting context)
• Debt (specifically a short-term trade debt)
• Bill
• Invoice Payable

Related Phrases

• To settle an account payable: To pay off the debt.
  • We settled the account payable with our main supplier last week.
• Outstanding accounts payable: Refers to payables that have not yet been paid.
  • The manager reviewed the list of outstanding accounts payable.

Noun

1. a liability account showing how much is owed for goods and services purchased on credit
   • the problem was to match receivables and payables in the same currency