Just as there are accounts receivable (A/R), or money that is owed to you, there are accounts payable (ACCOUNTS PAYABLE), or money that you owe to others. ACCOUNTS PAYABLE isn’t nearly as much fun as the former, but it’s a part of business life. Taking care of the A/1′ is important, because your company’s credit rating and reliability as a business could be at stake. As a manager, you will need to understand how this all comes into play.

Let’s start with a definition. Similar in structure but opposite in purpose to accounts receivable, accounts payable is a list of monies owed by the company to creditors, usually from the purchase of merchandise, materials, supplies, equipment, or services.