Accounts payable
In one sentenceAmounts the business owes its suppliers for purchases or services obtained on credit.
Simply put
Buying on credit gives you goods today and you pay later. What you have not paid yet is accounts payable, a current liability.
Managing it well protects your relationship with suppliers and your cash: don't pay before the due date without a reason, and don't pay so late that you lose discounts or trust.
Worked example
A restaurant tracks its meat and vegetable suppliers' account during the year.
Suppliers' balance at the start of the year60,000 SAR
Credit purchases during the year150,000 SAR
Paid to suppliers130,000 SAR
Accounts payable at year-end (60,000 + 150,000 − 130,000)80,000 SAR
Don't confuse it with
Accounts receivableThe opposite: what customers owe you.
Accrued expenseAn expense whose invoice has not arrived yet, while accounts payable are backed by invoices received.
in FullScreen ERP
Supplier accounts in the system come with account statements and supplier payables aging. Purchasing and suppliers