What is Accounts payable?
Accounts payable (AP) represent short-term liabilities or obligations a company owes to its suppliers for goods or services received but not yet paid for. In Switzerland, accounts payable are a fundamental component of business operations and financial management, governed by the general provisions of the Swiss Code of Obligations (CO).
Accounts Payable in Swiss Business Practice
Accounts payable typically arise when a company purchases goods or services on credit. The amount owed is recorded as a liability on the company’s balance sheet and must be settled within the agreed payment terms, which commonly range from 30 to 90 days in Switzerland.
Managing accounts payable involves tracking invoices, ensuring accuracy, and prioritizing payments to maintain healthy relationships with suppliers. Timely settlement of AP obligations is critical for avoiding penalties, maintaining creditworthiness, and supporting efficient supply chain operations.
Importance of Accounts Payable
Accounts payable play a vital role in cash flow management, helping businesses balance their obligations while allocating resources effectively. In Switzerland’s competitive and structured business environment, efficient AP management contributes to operational stability and long-term financial health.