What Is Accounts Payable?

Accounts payable (AP) refers to the money your business owes to vendors, suppliers, or service providers for bills that have been received but not yet paid. It represents your outstanding obligations and is a key part of managing cash flow.

Accounts payable tracks who you owe and how much.

What Accounts Payable Includes

Accounts payable focuses on managing vendor bills and outgoing payments, including:

Bill tracking – Recording vendor bills and outstanding balances

Payment scheduling – Monitoring due dates to ensure timely payments

Payment processing – Recording and issuing payments to vendors

Vendor account management – Maintaining accurate vendor balances and records

Discrepancy resolution – Identifying and correcting billing or payment issues

Reporting & reconciliation – Ensuring accounts payable balances are accurately reflected in financial reports

Why Accounts Payable Matters

Effective accounts payable management helps businesses:

• Maintain strong vendor relationships

• Avoid late fees and payment penalties

• Manage cash flow and outgoing expenses

• Keep financial records accurate and up to date

Accounts payable ensures your bills are paid accurately and on time. A well-managed AP process supports cash flow, vendor trust, and reliable financial reporting.