Definition
Money a business owes to suppliers and vendors for goods or services already received. Managing it well means paying on time, keeping supplier relationships and credit standing intact, and knowing far enough ahead what is due so cash projections hold up. It is the mirror image of accounts receivable.
What it looks like in practice
A roofing contractor finishes a tear-off and reroof in the same week. The shingle supplier's invoice lands on net-30 terms, the dumpster company wants payment on pickup, the subcontracted gutter crew invoices immediately, and the equipment lease debits on the first regardless. Accounts payable is the list of all four with dates attached. The owner sequences them: gutter crew first because that relationship is worth protecting through winter, the supplier on day twenty-eight to hold cash while the homeowner's insurance check clears, the dumpster on pickup because there's no choice. Nothing goes late, and nothing goes early without a reason.
Why it matters
What a business owes, and when it chooses to pay, quietly sets its reputation with the people it depends on. Pay late and you collect fees, lose favorable terms, or find the supplier suddenly can't fit your order in during peak season. Pay everything the day it arrives and you drain the reserve you needed for payroll. The skill is deliberate timing, holding cash as long as the terms genuinely allow without spending down trust. That trust is hard to rebuild, and it's why payables can't be run purely off the bank balance; it belongs in the same planning as receivables.