What are accounts payable?
Accounts payable refers to money a business owes to suppliers or vendors for goods and services received but not yet paid. It also refers to the function or team responsible for managing these obligations.
Why are accounts payable important?
Managing payables ensures that a business meets its financial obligations on time. Strong control of payables supports supplier relationships and helps maintain cash flow stability.
How do accounts payable work?
When a business receives an invoice, it records the liability in accounts payable. The payment is then processed according to agreed terms, such as 30 or 60 days.
What is the role of an accounts payable team?
The team verifies invoices, schedules payments, manages supplier records, and ensures accurate recording of liabilities. They also help prevent duplicate or fraudulent payments.
What is the difference between accounts payable and expenses?
Expenses represent costs incurred by a business. Accounts payable represents unpaid expenses which remain outstanding.