Accounts Payable Definition

Accounts Payable Definition

Understand what we mean by accounts payable. Why the process is called accounts payable and what are the other names by which this process is known as. Download a ready recokner to keep with you.

What is Accounts Payable

  • Accounts payable is the amount owed for the purchase of goods or services at a specific date.
  • It is the money that a company owes to vendors for products and services purchased on credit extended in the normal course of business.
  • As a general practice suppliers offer to their customers credit, which is an payment arrangement to pay for a product or service after it has already been received.
  • Accounts Payable is presented as Current Liabilities under the Liability section of the Balance Sheet. It represents a negative cash flow for the company.
  • Accounts payable are often referred to as "payables".
  • Accounts Payable is considered as Current Liability, meaning that it is a short term credit extended to the business expected to be fulfilled in less than a year
Accounts Payable Definition

Related Links

Creation Date Sunday, 15 April 2012 Hits 21475 Accounts Payable, AP, AP Cycle, AP Process, Finance, Functional Knowlede, Functional Skills

You May Also Like

  • Distribution Network Planning

    Distribution Network Planning

    To stay competitive in today’s tough market, the location of your warehouse is vital. To grow retail business need to offer to customers faster and affordable shipping time, which is dependent on the  warehousing location as the location of the warehouse affects the transit time to ship orders to customers.

  • Accounts Payable Journal Entry

    Accounts Payable Journal Entry

    Although in the large organizations the Procure to Pay Accounting process starts when the purchase order for supply of goods is released to the supplier. To keep things simple in the beginning we will discuss the core accounting entries related to the Accounts Payables process.

  • Account Payable Process

    Account Payable Process

    Understand the Accounts Payable process. Understand the AP cycle and the various tasks that need to be completed during AP transaction processing. Learn the key activities and setups that are done in any typical system during the AP processing.

  • Inbound Putaway Process

    Inbound Putaway Process

    After products have been received and passed a quality inspection, they need to be stored so that you can find them when you need them. This process is called putaway. The spot where you store a particular product is called a location. One section of a warehouse might have small locations for light items; another area may have large locations on the floor for heavy items.

  • Warehouse Count Process

    Warehouse Count Process

    Inventory is money, and hence businesses need to perform physical inventory counts periodically to make sure that their inventory records are accurate. The traditional approach to conducting inventory counts is to shut down a facility during a slow time of year to count everything, one item at a time. This process is slow, expensive, and (unfortunately) not very accurate.

  • Warehouse Consolidation

    Warehouse Consolidation

    Transport operations are often divided into full load and part load and due to economies of scale, the unit costs are higher for part loads. Our customer needs several part loads delivering, so it can reduce costs by consolidating these into full loads. Then it gets all the part loads delivered to a warehouse near the suppliers, consolidates them into full loads, and pays the lower costs of full-load transport to its operations.

  • Types of Order Picking Methods in the Warehouse

    Types of Order Picking Methods in the Warehouse

    There are many different types of picking in a warehouse and each one works as a customized solution for each business. Depending on the size of your warehouse and inventory, the manpower you have on hand, and the number of customer orders made each day, there may be certain methods that are more efficient for you than others.

  • Accounts Payable Department

    Accounts Payable Department

    Large companies have huge number of suppliers. To remain competitive they need to manage their procure to pay process very effectively. They create specialized division to handle these operations.

  • Warehouse Layouts

    Warehouse Layouts

    One of the most important decisions when running a warehouse is its layout. Warehouse layout defines the physical arrangement of storage racks, loading and unloading areas, equipment and other facility areas in the warehouse. A good layout aligned with the business needs could have a significant effect on the efficiency.

  • Accounts Payable System

    Accounts Payable System

    We need a strong payables process so that it provides us with a high-productivity accounting solution to process vendor payments. An integrated payables process provides strong financial control so you can prevent duplicate payments, pay for only the goods and services you order and receive, and maximize supplier discounts.  Understand the key features of an effective accounts payable system.

Explore Our Free Training Articles or
Sign Up to Start With Our eLearning Courses

Subscribe to Our Newsletter


© 2023 TechnoFunc, All Rights Reserved