Business liabilities for a company can be considered more or less the same thing as its Payables, and that means every business on earth has liabilities. Virtually any activity you carry out for your business will generate liabilities, in the form of credit card transactions, loans, mortgages, employee payroll, and even sales tax you have to collect from customers.
When you think about long-term liabilities, these will include all those business obligations which last longer than a single year. The mortgage for a building used by your business would be one example of long-term liability, and any loans you take out for longer than one year would also be long-term liabilities.
Virtually all other liabilities which fall outside the realm of long-term liabilities would be considered of short term duration and could be paid off in less than a year. One good example of this is sales tax is payable since these are collected from customers at the time a purchase is made. These tax amounts are then retained until it’s time to remit them to the appropriate revenue department at the state level. Payroll taxes payable are collected from employees in the form of withholding amounts, and they are set aside in accounts set up for that specific purpose. At the appropriate time, these amounts would then be forwarded to various state tax agencies, or to the Internal Revenue Service.
Loans and mortgages payable are generally comprised of monthly payments which are made on loans which your business has taken out, and on mortgages of any buildings owned by your business. Since these are current liabilities, they are included under the short-term liabilities umbrella, even though they will not be paid off within a year.
Trying to grow your business?
Quite often, all that prevents a business from growing is an infusion of capital that will take it to the next level. If this is true of your business, contact us at Capital Connex, so we can consider some financial options which may be available to you.