Payables refers to the full range of obligations owed by a business. Examples of payables include the following:
Payables are mostly classified as short-term liabilities on the balance sheet; this classification applies when a payable is due within the next twelve months. All other payables are classified as long-term liabilities. Since the balance sheet line items are sorted in declining order of liquidity, this means that short-term payables are reported higher on the balance sheet than long-term payables.
A business typically keeps close watch over its ability to meet the obligations represented by its payables. Otherwise, late payments or defaults can trigger a slide in a company's credit rating, and could even lead to bankruptcy.
The payables concept also applies to households, where examples of payables are mortgage invoices, doctor's bills, and utility statements.
Payables are also known as accounts payable.