Accounts Payable

What Does Accounts Payable Mean?

Accounts payable is a term referring to the amount of money a business owes to its suppliers.

How it Works

​A business will buy goods and services on credit from suppliers.

​This means the supplier will allow the business time to pay for the goods and services.
​A supplier is also known as a creditor.
​They are called this because they extend credit over time.
​A business may have many suppliers.
​The total amount of money owed to all suppliers is known as accounts payable.

To see how to account for accounts payable, see ‘Recording Supplier Transactions

© R.J. Hickman 2020