Accounts Payable Definition

Definition:

Amounts owed by a business for purchases made on credit. These amounts are paid by the business after a period of time (which can differ from business to business, but is usually 30 days) referred to as “Days Payable Outstanding (DPO).” This term is also often used to refer to the accounting/billing department in a company (for example, “We got the bill today – send it straight to Accounts Payable and they’ll handle it.”).

Examples:

The invoice states that this shipment will be billed through Accounts Payable and that the bill is due in thirty days.

Once the accounting department enters this bill into the system, it will show up in the accounts payable column until it is paid.