Any organization operating in the field of market economy is characterized by the fact that a certain part of its funds is drawn up from accounts payable. In general, it represents a certain legal category, meaning a part of the property, which is the subject of financial relations between the enterprise and the creditor. In this article, we consider what is payables? Do we owe this or us? We will also determine how its enterprises take into account, why it is necessary to analyze it and what consequences arise as a result of overdue debt.
Characteristic
The first step is to characterize accounts payable as a legal category for the organization. In fact, the share of equity that was acquired from third-party funds is the payables. The definition of debt states that it is issued for a specified period and is repayable. Accordingly, accounts payable will have to be covered after a certain time.
The property of the enterprise consists of both its own funds acquired from the share capital and profits, and debts. Both are inevitable parts of the business process. Accounts payable include not only cash, but also commodity values acquired in material credit. Based on this, we get the answer to the question: “Accounts payable - do we owe this or do we?” After all, it is a direct definition of a debt obligation. Accordingly, the company implies its debts to creditors.
Main varieties
The accounts payable of an enterprise are divided according to the characteristics of the creditor. The following types are distinguished.
1. Accounts payable to the budget and extra-budgetary funds. In particular, taxes themselves and payments to funds, as well as fines, penalties, and forfeits.
2. Accounts payable to employees of the organization. In particular, wage arrears.
3. Accounts payable for goods, work, services to third parties, as well as debts on payment of dividends , etc.
Dividend arrears represent a debt to the founders to pay them income in the distribution of profits. It is formed due to the fact that at the time of compiling the balance, the calculated dividends cannot be paid. This means that a certain amount is included in accounts payable.
As a result, we can derive a definition of accounts payable, which means that the organization:
- owes a certain amount in favor of individuals or legal entities resulting from financial relationships;
- has debts in the form of invoices issued for delivery on credit or payment by installments.
Accounts payable
For accounting, it is customary to separate three types of accounts payable. The basis for such a classification are the terms for which payables are drawn up. In this case, we must other enterprises, workers and foundations on certain conditions. If a deferred payment is agreed with the creditor, then the debt in question is characterized as nominal. In the event that such a delay reaches one year, then accounting records the debt as short-term. If time passes beyond this period, the debt develops into a long-term one. There is a nuance here. When long-term debt begins to exceed three years, and the creditor makes no claim for its repayment, then they are written off in the account.
Need for analysis
Accounts payable as a legal and accounting concept is of great importance for the effective activities of the organization. Once again, we raise the question: "Accounts payable - do we owe this or do we?" We define the basic essence of such a concept, which is a commitment. So, accounts payable can directly affect profit, the functioning of the organization, bankruptcy. Therefore, the analysis of its formation, repayment and management plays a large role in the entire process of the enterprise.
Consideration of debts to creditors is carried out on the basis of the totals of accounting, in particular the balance sheet and form No. 5 attached to it. Based on the totals in the accounting forms, certain coefficients are calculated showing how much liabilities are payable, how it affects liquidity and solvency organization. Quality management is represented by indicators characterizing the timeliness of its repayment.
Past due debts
When the company has not paid the debt to the creditor within the period established by the contract, and also has not paid the invoice, the payables are transferred to the category of overdue. In this situation, the borrower, seeking to protect his statutory rights, may turn to the court for help. The creditor writes a statement of claim and teaches him all the legal documents confirming financial claims.
A citizen needs to remember that such a situation will ruin his business reputation and lower his commercial image in the market of such organizations. In addition, there will be additional costs in the form of judicial fines and sanctions.
Accounts payable for which the limitation period has expired
According to the division of the debts under consideration, which are registered for more than one year, a limitation on the duration of long-term debt is not provided. But it is believed that if the borrower after three years does not present a claim for repayment, then the amount in question is written off.
Accounts payable for which the limitation period has expired is written off for each individual liability. The amount is determined by the results of the inventory.
They do not have a deadline to write off taxes and fees, as well as fines and penalties for them. The remaining creditors are entitled to interrupt the duration of long-term debt and demand the return of the entire amount.
In conclusion, it remains to note that there is a simple answer to the question: “Accounts payable - do we owe it or do we need it?” This is done based on the definition of the creditor - the person providing the funds with the condition of return. Moreover, debt is not just money on credit. It can be material and economic values necessary for the organization for the smooth process of financial and economic activity.