Accounts payable refers to the money a company owes to its suppliers or vendors for goods and services received but not yet paid for. This liability is recorded on the company's balance sheet and represents a short-term obligation that must be settled within a specific period, usually within a year. Managing accounts payable is crucial for maintaining healthy cash flow. Companies track these obligations to ensure timely payments, avoid late fees, and maintain good relationships with suppliers. Efficient management of accounts payable can also help businesses take advantage of discounts for early payments.