Another name for accounts payable is trade payables. This term refers to the amounts a company owes to its suppliers or vendors for goods and services purchased on credit.
Trade payables are typically recorded in the company’s balance sheet as current liabilities, as they are expected to be settled within a year. This category of liability signifies the company’s obligation to pay off short-term debts to its creditors.
Understanding the terminology associated with accounts payable helps businesses manage their cash flow and maintain good relationships with suppliers. It’s essential for a company to have a clear grasp of its trade payables to ensure timely payments, which can help avoid late fees and maintain vendor trust.