Payables

Payables refer to the amounts of money that a company owes to its creditors for goods or services received but not yet paid for. These obligations are recorded as current liabilities on the balance sheet and are typically settled within a short period, such as 30, 60, or 90 days. Payables are an essential component of company cash flow management and financial planning.

Payables meaning with examples

• In managing our cash flow, we need to prioritize our Payables to ensure that we can meet our short-term obligations without jeopardizing our operational efficiency. This entails a thorough review of which invoices are due and organizing our payments accordingly, allowing us to maintain good relations with our suppliers while optimizing our liquidity.
• Our finance team has developed a robust system that tracks all outstanding Payables, ensuring that every invoice is accounted for and paid on time. By employing this meticulous approach, the organization minimizes late fees, strengthens vendor relationships, and keeps the credit score in good standing, which is essential for future negotiations.
• During the quarterly financial review, we discovered that our Payables had increased significantly compared to the previous quarter. This surge necessitated a discussion about our purchasing strategies and whether we could renegotiate payment terms with some suppliers to improve our cash flow situation and reduce outstanding liabilities.
• As part of the due diligence process, potential investors conducted a thorough examination of our Payables to evaluate our financial stability and liquidity. They assessed the payment terms we had with our suppliers and how efficiently we managed our short-term liabilities, recognizing that effective management of Payables is crucial for sustaining business operations.