Accounts payable, or creditors, is the money you owe suppliers for goods or services you've received but not yet paid for. This guide explains its role in cash flow.
Published July 2026 · Updated July 2026
Accounts payable is the total you owe suppliers for bills you've received but not yet paid. It's a current liability, an obligation to pay, and the mirror image of accounts receivable.
Sensible payment terms with suppliers give you breathing room in your cash flow: paying a little later (within agreed terms) keeps cash in the business longer. But paying late without agreement can damage relationships and supply.
An expense is the cost itself; accounts payable is the unpaid portion you still owe. Under accrual accounting you record the expense when incurred, creating a payable until you pay.
Stretching payables (within terms) keeps cash in the business longer, while collecting receivables faster brings cash in sooner.
Source: Investopedia ↗. This glossary is written for small business owners, so definitions are simplified. Tax rates and thresholds reflect 2026/27 UK rules and change over time. Berified does not provide accounting, tax or legal advice; always check the source or a qualified adviser.