A company’s short-term debt obligations.
A subset of Accounts Payable, Current Accounts Payable describe the short-term debt obligations your company owes. These debts are typically monthly recurring expenses, e.g. for utilities, travel, and office supplies. In other words, these are the smallest or most basic expenses, and not debt related to the acquisition of large assets.
Current Accounts Payable is a relevant KPI for your finance team to monitor.
Current Accounts Payable are relatively small but important expenses, so it’s important to have the cash flow on hand to accommodate them, whether they are subscriptions, utility bills, or other recurring expenses. In the event of an emergency, or if a need for additional resources arises, being able to cover these additions on your Current Accounts Payable will give you peace of mind.
The best practices for Current Accounts Payable are to write these expenses into your monthly budget, and to ensure you have sufficient cash flow on hand to make these payments.
If you require cash flow to make these payments on time, you can optimize your Accounts Receivable and Payable to obtain the needed funds.
Other KPIs similar to Current Accounts Payable include: