Notes payable is the flip side of notes receivable — it is a formal written promise your company makes to pay someone else a specific amount by a set date, usually with interest. It is a liability on your balance sheet.
For example, if your business borrows $100,000 from a bank and signs a promissory note to repay it in 2 years at 6% interest that is notes payable.
Short-term notes payable (due within a year) are current liabilities, while long-term notes are non-current. They are more formal and legally binding than accounts payable.