Definition: The schedule of accounts payable is a listing of all vendors in the accounts payable ledger that the company currently owes money along with the current account balances. In other words, the schedule of accounts payable is a list of all the people who the company owes in the accounts payable system.
What Does Schedule of Accounts Payable Mean?
The schedule of accounts payable is useful for two main reasons. First and foremost, this schedule allows managers and the accounts payable department to track and organize the vendor accounts which need to be paid. For instance, most retailers and manufacturers buy inventory and goods from other businesses.
It is rare that these transactions paid in cash. Instead, the purchasing company simply puts the purchase on account and pays the seller within 30 days after the purchase. This system speeds up business transactions and allows businesses to buy goods easier.
As you can imagine, businesses can have hundreds of other businesses on account. This can lead to some confusion as to what company must get paid when. The schedule of accounts payable can be prepared to show all the outstanding accounts payable, who is owed the money, and how much is owed. In other words, it’s a way to track the accounts payable.
The schedule of accounts payable can also be used to prove out the subsidiary and control accounts payable accounts at the end of a period. Since purchase orders are posted to the subsidiary accounts and the subsidiary accounts are posted to the control accounts, the subsidiary accounts need to be double checked. Management can double check or prove out the subsidiary accounts before they are posted by comparing them to the schedule of accounts payable.