what are trade payables

Trade payables are short-term expenses incurred by businesses when they use products or services from a third-party vendor or supplier to deliver their products to their customer. When a company buys goods on credit, it creates an obligation to pay in the future, typically within a short period, such as 30 to 90 days, and this obligation to the supplier is recorded as a trade payable. The amount billed by the vendor or supplier is the amount logged under “accounts payable” in accounting, and if paid on credit, it appears in the accounts payable aging report until it is paid. Trade payables are considered a short-term liability in accounting terms and are listed as a current liability on a companys balance sheet.