What does A/P refer to in business terms?

Accounts Payable, often abbreviated as A/P, refers to the amount of money a company owes to its suppliers for goods and services that have been delivered but not yet paid for. This is a crucial part of a company's short-term liabilities on its balance sheet. Proper management of accounts payable is essential for maintaining healthy cash flow and ensuring that obligations to suppliers are met in a timely manner, helping to maintain good relationships and favorable credit terms.

In this context, the understanding of accounts payable is fundamental for financial management, as it impacts operational efficiency and the overall financial health of a business. By effectively managing accounts payable, a company can take advantage of payment terms, avoid late payment fees, and optimize working capital.