What do you mean by Accounts payable cycle?

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raghunath.bhat  

  • Member Since Jul-2008 | Jul 1st, 2008


Accounts payable process means by checking the payable invoices (purchase) and then send it to payment and lastly settlement of payment.

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The Accounts payable cycle is one of the internal processes of operating cycle in which time is measured for making cash outflows into cash inflows. In the process of Accounts payable cycle time taken for receiving cash or money in accounts payable is measured. This time taken is directly proportional to the mean number of days taken for converting business into sales in the process of accounts payable.

Mohamed Najeeb

  • Oct 30th, 2007
 

Accounts payable cycle starts with cash. Cash converted to goods, goods converted into credit sales, credit sales converted to creditors, and finally creditors converted to payables.

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