What is accounts payable?
Accounts payable is money you owe your suppliers for goods or services you have already received but not yet paid for. It is an outstanding obligation and sits under current liabilities.
Where it sits
Under current liabilities, because payables are normally settled within a year or less.
The golden rule for liquidity
Match the timing of your receivables against your payables. If you collect after 90 days but pay within 30, you are financing your customers out of your own pocket — a common reason profitable businesses run into trouble.
Frequently Asked Questions
Payables are what you owe others; receivables are what others owe you. The first is a liability and the second an asset — two sides of the same credit transaction.
Buying on credit gives you temporary liquidity, but it is an obligation that falls due. The danger starts when your payables come due before your receivables are collected.
Keep a balance and due date per supplier. Qayd aggregates your obligations automatically and shows the total owed along with due dates.
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