What is the official business definition of Accounts Payable? Well, the dictionary says it’s money you owe to creditors. The IRS says it’s any amount you owe for goods or services that was not paid within 30 days.

But in the accounting world, it’s a bit more specific than that. Accounts Payable is an account on a company’s balance sheet that represents the total amount owed to suppliers and other vendors who have provided goods and services to the company. The business owes this money to its suppliers, so it’s a liability of the company. This means that Accounts Payable is listed as a liability on a company’s balance sheet.