DEFINITION
Any short-term debt, excluding payroll, that your business is expected to pay. Generally due in 30-60 days; does not carry interest fees.
IMPORTANCE
An accurate accounts payable process leads to accurate financial statements, a key component of any business. A dependable system creates good relationships with suppliers and a good credit rating. Paying debts on time also reduces costs from penalties and late fees.
EXAMPLE
- Utility bills
- Advertising and marketing
- Travel
- Office supplies
- Entertainment
- Vendor invoicing
