Current Liabilities

What are current liabilities?

Current liabilities are debts your business must pay within the next year. This includes bills from suppliers, the current portion of loans, credit card balances, and wages owed to employees. Current liabilities represent your short-term financial obligations.

Types of current liabilities

Common current liabilities include:

• Accounts payable — Bills from suppliers and vendors
• Short-term loans — Loans due within a year, or the current year's portion of longer loans
• Credit card balances — Amounts owed on business credit cards
• Accrued expenses — Costs incurred but not yet billed (like utilities)
• Payroll liabilities — Wages and payroll taxes owed
• Unearned revenue — Deposits received for work not yet completed

Managing current liabilities

Keep current liabilities manageable relative to your current assets. If you owe more than you have available, you may struggle to pay bills on time. Track payment due dates carefully to maintain good relationships with vendors and avoid late fees.