oboloo Glossary

Account Payable Vs Notes Payable

oboloo Glossary

Account Payable Vs Notes Payable

Accounts Payable and Notes Payable are two different forms of liabilities that businesses must manage. Accounts Payable is the money owed to suppliers and vendors for goods and services purchased on credit. This is typically a short-term liability, with payments due within 30 days. Notes Payable, on the other hand, is a written promise to pay a certain amount of money on a specified date. It is usually a long-term liability, with payments due over a period of time. Notes Payable is usually used when a business needs to borrow money from a lender or investor, and is usually secured by collateral. Both Accounts Payable and Notes Payable are important for businesses to manage in order to maintain a healthy financial position.