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Balance sheet

Accounts payable

Money the business owes to suppliers for goods or services already received but not yet paid for.

Accounts payable is the money owed to suppliers: bills received, not yet paid, sitting as a short-term liability. It is the mirror of accounts receivable: there, customers owe you; here, you owe suppliers.

Bigger payables relative to costs means the business takes longer to pay, effectively an interest-free loan from suppliers funding the operation. Days payable outstanding (DPO) measures it directly.

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