How To Calculate Average Accounts Payable

It is the sum of Opening Accounts Payable and Closing Accounts Payable divided by two (2).

Mathematically, we can show as below:

Average Accounts Payable = Opening Accounts Payable + Closing Accounts Payable / 2

Average Accounts Payable / Creditors helps us in keeping our Credit Purchases and payments to suppliers in balance during the accounting cycle.