Listen to a Business English Dialogue About Accounts payable
Paisley: Hi Amelia, have you heard about accounts payable in business and finance?
Amelia: No, what are they?
Paisley: Accounts payable are amounts owed by a company to its suppliers or vendors for goods and services purchased on credit.
Amelia: Oh, I see. So, it’s like the company’s short-term debts to its suppliers?
Paisley: Exactly. Accounts payable represent the company’s obligations to pay for goods and services received but not yet paid for.
Amelia: Are there any specific terms associated with accounts payable?
Paisley: Yes, companies often have payment terms with their suppliers, specifying when payments are due, such as “net 30” or “net 60” days.
Amelia: That’s interesting. How do accounts payable affect a company’s financial health?
Paisley: Accounts payable impact a company’s liquidity and cash flow, as they represent funds that must be paid out in the near future.
Amelia: Thanks for explaining, Paisley. Accounts payable seem like an important aspect of managing a company’s finances.
Paisley: No problem, Amelia. Proper management of accounts payable is crucial for maintaining good relationships with suppliers and ensuring the company’s financial stability.