Payables, or sundry creditors, are the total of unpaid supplier bills. They are a liability on the balance sheet. Paying suppliers on agreed terms, neither early nor late, is one of the simplest ways to protect cash and reputation.
The MSME rule
Under sections 15 and 16 of the MSMED Act, 2006, a buyer must pay a micro or small supplier registered on Udyam within the agreed period, which cannot exceed 45 days, or within 15 days where nothing was agreed. Late payment carries compound interest at three times the bank rate notified by the RBI.
Under income tax, an amount owed to a micro or small enterprise and paid after that time limit is allowed as an expense only in the year it is paid. This is section 37(2)(g) of the Income-tax Act, 2025, earlier section 43B(h) of the 1961 Act (as of October 2026). Companies also report MSME dues outstanding beyond 45 days to the Ministry of Corporate Affairs.
Managing payables
- Pass a bill only after it matches the purchase order and goods received.
- Note each supplier's Udyam status and terms.
- Plan payments by due date, with MSME suppliers first.
In MatruOS, money to pay appears on Home, and supplier bills are paid after the three-way match.