The Accounts payable is a subarea of Bookkeeping in which liabilities to suppliers and other creditors are recorded and managed. This includes incoming invoices, open liabilities and the associated payments in particular.
What is Accounts payable?
A creditor is someone to whom a business has a financial obligation. Typically, such a liability arises when a supplier or service provider issues an invoice for a delivery or service already rendered.
In Accounts payable these liabilities are allocated to the corresponding creditors and recorded transparently until they are settled.
What is recorded in Accounts payable?
The Accounts payable includes in particular information on:
- Eingangsrechnungen
- Trade payables and other creditors
- purchase ledger accounts
- open and balanced liabilities
- Payments to creditors
Outstanding liabilities are recorded as open items (OPOS) led.
Creditors and Accounts receivable - what is the difference?
The Accounts payable deals with a company's liabilities to its creditors. The Debtors ledger represents, on the other hand, receivables from customers or other debtors.
In short: Creditors stand for accounts payable – debtors for accounts receivable.
Connection with payments
When a liability is paid, the open items of the respective creditor changes. The corresponding payment can simultaneously be used as bank entry are recorded in Bookkeeping.
Accounts payable and bank transactions are therefore closely related, yet they describe different areas of accounting.
