Accounts payable is how a business processes accounts in the accounting cycle. You may choose to pay bills as soon as they land, but it’s more likely you'll have a number of bills to pay at different times. By adding them to accounts payable you can pay them at a date that suits you and your client.
Sage accounts payable software helps businesses streamline their accounts payable processes through invoice automation, payment remittance, tax calculation and supplier management – for small business accounts payable and receivable.
When a business buys goods or services on credit (rather than cash) it will credit Accounts Payable and the credit balance will increase. When a business pays one of its suppliers the amount included in Accounts Payable, the company should debit Accounts Payable meaning the credit balance is decreased.
Accounts payable is a short-term credit mechanism used by a business to pay a supplier for products and services. Payment terms differ, typically across 30 or 90 days. The payable amount goes into default if a business does not pay within the terms agreed, and is listed on a company's balance sheet. Accounts payable is a liability since it's money owed to creditors and is listed under current liabilities.