Accounts Payable refers to the company’s short-term obligations owed to its creditors or suppliers which have not been paid yet. It appears as an account on the company’s balance sheet and classified under current liability. It is the sum of all outstanding amounts owed to vendors.
It is important to track your payables to maintain good relationships with your suppliers by making sure these are paid on time. Being able to track your payables also makes you gain favorable payment terms and discounts.