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.
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Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
Christie has written 799 awesome articles for us at Alan Lewis Accountants – BLOG
Twitter: @christielewis
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