Accounts Reconciliation Blog

The accounts payable department is the department that pays clients and suppliers. Accounts payable turnover is the amount of time it takes to make those payments. The accounts payable department is dependent on the accounts receivable department. When the money comes in the payments can go out.

In an accounting period, an accounts payable turnover measures the company’s efficiency of paying bills. This is measured using the average duration an item remains in accounts payable, equal to total purchases, divided by average accounts payable. A change over time in the accounts payable turnover means your company is paying off its suppliers either faster or slower than you were previously doing.