Accounts payable (AP) is the money you owe to suppliers for goods or services you have received but not yet paid for. It is the opposite of accounts receivable — this time, you are the one who owes.
For example, if a restaurant receives $10,000 worth of food supplies with a 30-day payment term, that $10,000 is recorded as accounts payable. It appears as a current liability on the balance sheet.
Efficient AP management balances paying suppliers on time (to maintain good relationships) with holding onto cash as long as possible (to maximize working capital). Many companies aim to pay just before the due date.