What is a current liability?
Definition of a current liability
A current liability is money that your business owes which it will have to pay within a year.
Examples of a current liability:
Classic examples of current liabilities are money that the business owes to HMRC, such as VAT or Corporation Tax and money owed to its suppliers, such as a solicitor or an accountant. Money owed to suppliers is also called 'trade creditors'.
If your business is a limited company, you will find its current liabilities are called "Creditors; amounts falling due within 1 year" in its statutory accounts filed with Companies House.
Where to find current liabilities
Current liabilities appear on a business's balance sheet.
Keeping track of your business's current liability
FreeAgent is a powerful double-entry accounting engine which can generate reports - including balance sheets - enabling you and your accountant to easily keep track of your business's liabilities.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.