What is Accounts Payable?

A definition of Accounts Payable

“Accounts payable refers to the amounts a company owes to suppliers for goods or services purchased on credit. It is recorded as a liability on the company’s balance sheet and represents short-term debt obligations.”

Accounts Payable in Business Glossary - What is Accounts Payable?

Business Glossary > What is Accounts Payable?


Examples of Accounts Payable in a Sentence:

The company’s accounts payable increased due to a large purchase order.

Regular audits of accounts payable help prevent financial discrepancies.

Timely management of accounts payable is crucial for maintaining good supplier relationships.

Why is Accounts Payable Important in Business?

Understanding accounts payable is vital for managing a company’s cash flow and financial health. Proper management ensures timely payments to suppliers, which can maintain credit terms and business relationships.

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Associated Terms

Here are some associated business terms and synonyms for “Accounts Payable”:

  • Creditors
  • Trade Payables
  • Outstanding Bills

Apple Inc. Accounts Payable

Apple Inc. effectively manages its accounts payable to maintain strong relationships with suppliers and to ensure the smooth production and delivery of its products. By extending its payment terms strategically, Apple can optimize its cash flow while investing in research and development.

Final Notes on Accounts Payable

Businesses must manage accounts payable carefully to ensure financial stability. Delays in payments can lead to strained supplier relationships and potential supply chain disruptions.


This has been a definition of Accounts Payable meaning.

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