Accounts payable explained

Accounts payable are bills due to suppliers for inventory items already purchased.

To compete for your business, many suppliers will extend you credit and flexibility to pay for purchases 30 more days after you receive them.  You can use this interest-free credit to help fund your operations.  Most suppliers will offer their customers easy credit – find out how to apply.

Many suppliers offer a discount for early payment. Budgeting your cash flow can help you know when to take advantage of these discounts.

Sealey Power Products Warehouse
Sealey Power Products Warehouse by toolstop, on Flickr

Accounts payable are the inverse of accounts receivable.  Your accounts payable is, on the books of your supplier, an accounts receivable.

2 thoughts on “Accounts payable explained

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