Accounts Payable
Accounts payable (AP) is money your business owes to suppliers, vendors, and creditors for goods or services you have already received but not yet paid for. It is a real obligation on your balance sheet that will require cash to settle.
Types
Trade Payables
Money owed to suppliers for inventory, materials, or services used in your business operations.
Accrued Liabilities
Expenses incurred but not yet billed, such as wages earned by employees that have not yet been paid.
Why it matters
Managing AP well is a balancing act. Paying too early drains cash unnecessarily. Paying too late damages vendor relationships, incurs late fees, or costs you favorable payment terms. Knowing your AP balance at all times helps you plan cash outflows before they hit.
Real-world example
A dental practice owes $12,000 to Benco Dental, $4,500 to a lab, and $3,200 in outstanding utility and lease bills. Total AP: $19,700. That cash obligation is due within the next 30 days, which is critical context when planning payroll and supply orders.
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Ask FREM: "What do I owe in the next 30 days?" to get a real-time view of outstanding payables from your QuickBooks data.
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