what is accounts payable ap 
accounts payable ap or payables refers to a company s short term obligations owed to its creditors or suppliers which have not yet been paid payables appear on a company s balance sheet as a current liability another less common usage of ap refers to the business department or division that is responsible for making payments owed by the company to suppliers and other creditors accounts payable can be compared with accounts receivable investopedia alison czinkotaunderstanding accounts payable ap a company s total accounts payable balance at a specific point in time will appear on its balance sheet under the current liabilities section accounts payable are obligations that must be paid off within a given period to avoid default at the corporate level ap refers to short term payments due to suppliers the payable is essentially a short term iou from one business to another business or entity the other party would record the transaction as an increase to its accounts receivable in the same amount ap is an important figure in a company s balance sheet if ap increases over a prior period that means the company is buying more goods or services on credit rather than paying cash if a company s ap decreases it means the company is paying its prior period obligations at a faster rate than it is purchasing new items on credit accounts payable management is critical in managing a business s cash flow 