Accounts payable refer to amounts a business owes to suppliers for goods or services received but not yet paid for. These are typically short-term obligations and are shown as current liabilities on the balance sheet.

‍Example: Suppose your tech startup purchases office supplies on credit from a supplier, the amount owed becomes part of accounts payable until it's paid off. If the company bought £2,000 worth of office chairs with a 30-day credit period, this amount remains in accounts payable until settled within those 30 days. Proper management of accounts payable is crucial to maintaining good supplier relationships and cash flow.