Accounts Payable is an asset or liability that businesses incur when issuing goods or services on credit. It’s a promise to make payments in the future for a certain amount of money and should be tracked accurately, so that the company can stay on top of its financial obligations and pay its suppliers in a timely manner. Having a clear understanding of what Accounts Payable is helps businesses create more efficient processes related to purchasing, invoicing, and payments. Knowing when and how much payment is due allows companies to establish better cash flow and prevent them from taking on too much debt.