Glossary
Accounts payable
Accounts payable is what a business owes its suppliers for goods and services already received but not yet paid for. It sits as a current liability on the balance sheet and represents short-term credit extended by suppliers. Stretching payables improves cash today but strains supplier relationships and can cost early-payment discounts. Reviewing the payables listing by age is one of the fastest ways to see whether a business is quietly funding itself on its suppliers.
Related reading