A bill payable is a document which shows the amount owed for goods or services received on credit. Examples of a bill payable include a monthly telephone bill, electricity bill, a bill for repairs or maintenance, the bill for merchandise purchased by a retailer on credit, etc. The provider of the goods or services is referred to as the supplier or vendor. Hence, the bill payable is also known as an unpaid vendor invoice.
Under the accrual method of accounting or bookkeeping, a bill payable or unpaid vendor invoice is recorded in Accounts Payable with a credit entry. When the bill is paid, Accounts Payable will be reduced with a debit entry. The credit balance in Accounts Payable is reported on the company's balance sheet as a current liability.