Accounts Payable

Definition: Accounts payable refers to the amount of money owed to a creditor for goods and services.

Advice: Accounts payable are current liabilities because they must be paid within a year (often suppliers have far stricter time schedules).  In order to maximize value, companies try to postpone paying their suppliers for as long as possible.  Analysts examine accounts payable along with current assets like cash in order to determine if the company has enough money to pay off its short- term obligations.