Accounts Payable means…
…are short-term or current financial obligations that are created through the purchase of merchandise, obtaining of services, etc. At the end of each month it is normal to prepare a list of the money that is owing as accounts payable (also called sundry creditors).
Many businesses prepare an Aged Analysis of Accounts Payable (Sundry Creditors) which details the relative time period of the outstanding tax invoice eg 30 days, 60 days, 90 days, 120 days and over. Businesses should keep a close eye on the level of debt owing for accounts payable and ensure that the business is paying its bills in accordance with the terms of trade of the supplier.
WHAT’S IT MEAN? Quickies
This post is part of the “What’s it Mean?” series of short and sweet responses.
Be sure to check the other posts in the series for more quick definitions. You can follow the series along on the blog or read them first by subscribing to our popular Business Plus+ newsletter.
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