Accounts Payable

Money a business owes to its suppliers for goods or services received on credit.

Accounts payable (AP) is the total a business owes its suppliers for purchases made on credit. It is recorded as a current liability and represents short-term obligations to be paid.

Good AP management means paying on time to maintain supplier relationships and capture discounts, while optimizing cash flow. It is the mirror image of accounts receivable.

• A current liability: money you owe suppliers.
• Tracked by due date to avoid late fees and keep credit.
• Mirror image of accounts receivable.