Accounts Payable refers to the money that a company owes for the product or services. It is added as a liability on a company’s balance sheet. Let’s understand what is accounts payable more in deep. In case you or your firm have purchased goods on credit, which you need to pay back in the future, it is known as accounts payable. Accounts payable is said to be the liability because you need to pay the amount for goods within a short period of time.
Note: In case accounts payable increases over a prior period, it means that the firm is buying more services or goods on credit. On the contrary, in case the company's AP decreases, it means the company is paying its previous debts.
After knowing what are accounts payable let’s understand the importance of accounts payable.
Importance of Accounts Payable
Accounts payable is important for your business because it makes sure that the invoices are tracked and paid timely. It also helps you in avoiding missing the payments and making the payment twice.
Hope, you have got an idea of what is account payable with the above-mentioned explanation.
If you are still want to know additional information about what is accounts payable, then dial the Toll- Free Support Phone Number 1-877-263-2742.
Reference Source: https://www.nairaland.com/5840473/what-accounts-payable-complete-guide
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