Accounts Payable

Also called AP

Money you owe suppliers and vendors for goods or services you have received but not yet paid for. A liability on the balance sheet until settled.

Why it matters

Managing payables, paying on time but not early, is a lever for preserving cash. The gap between when you collect receivables and pay payables is a big driver of how much working capital you need.

For example

A startup owes its cloud provider and two agencies a combined 8 lakh for services already delivered; that sits as accounts payable until it pays the invoices.

Related terms

Accounts Receivable Working Capital Cash Flow

Go deeper

See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.

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