Accounts Payable Meaning and Definition

Pronunciation

/ˈækaʊnt.əs peɪ.əbəl/ 🔊

Part of Speech

Noun

Definition

A current liability for a company or organization that represents the amount due to be paid to its suppliers, vendors, or other creditors, typically within a specific timeframe.

Examples

• The company is struggling to manage its accounts payable, affecting its cash flow.
• The bookkeeper recorded a large accounts payable entry on the company’s ledger.

Synonyms

• Bills payable
• Debt payable

Antonyms

• Accounts receivable
• Assets

Additional Information

Accounts payable is a critical aspect of a company’s financial management, as it ensures the timely payment of debts and maintains a good relationship with suppliers and vendors. Properly managing accounts payable also helps to maintain a positive cash flow, ensuring the business can continue to operate efficiently. In some cases, companies may offer discounts for early payment or penalties for late payment, which can impact the overall cost of doing business.

Etymology

The term “accounts payable” originated in the 16th century, derived from the Latin words “accountem” meaning “account” and “ibiliare” meaning “to pay”.

Usage Notes

In financial contexts, “accounts payable” is typically used in singular form. It’s essential to clearly and accurately label and categorize accounts payable in financial records to ensure transparency and compliance with regulatory requirements.

Cultural References

Accounts payable is a common theme in business literature, accounting texts, and financial reports. It is often discussed in the context of corporate finance, cash flow management, and supply chain management.

Idiomatic Expressions or Phrases

“Pay your bills on time” is an idiomatic expression that indirectly refers to managing accounts payable.

Related Words or Phrases

• Accounts receivable
• Cash flow
• Liability
• Vendor finance

Collocations

• Accounts payable lag
• Accounts payable department
• Accounts payable policy

Frequency of Use

Accounts payable is a common term in financial and business contexts, with a frequency of use that increases with the complexity and scale of business operations.

Common Misspellings

• Accoutns payable
• Accountable
• Accoungs payable