oboloo Glossary

Account Payable Vs Note Payable

oboloo Glossary

Account Payable Vs Note Payable

Accounts Payable and Notes Payable are two different types of liabilities that businesses may incur. Accounts Payable are obligations to pay for goods or services that have been received but not yet paid for. This type of liability is typically short-term in nature and is typically paid within 30 days. Notes Payable, on the other hand, are formal, written agreements between a business and a lender or creditor. This type of liability is typically long-term in nature and is typically paid over a period of several months or years. The terms of the note are usually detailed in the note itself, and the interest rate and payment schedule are usually specified. In general, Accounts Payable are more immediate obligations, while Notes Payable are more long-term commitments.