Accounts payable, often abbreviated as AP, is a fundamental aspect of a company's financial obligations, representing the amounts owed to suppliers and vendors for goods or services that have been received but not yet paid for. These liabilities typically arise from credit purchases made by the company, forming a crucial component of its working capital management. As a short-term liability, accounts payable are recorded on the balance sheet and reflect the company's commitment to settle its debts within a specified period, contributing to the overall assessment of its financial health and liquidity position. Efficient management of accounts payable is essential for maintaining positive relationships with suppliers, optimizing cash flow, and ensuring smooth operations within the business.