The Procurement Glossary » Accounts Payable (AP)

Accounts Payable (AP)

Finance & Payments

Also known as: AP

Definition

The function and ledger responsible for recording and paying what a business owes its suppliers.

Explanation

AP receives, matches and pays supplier invoices and manages payment timing. It sits at the end of the procure-to-pay cycle, and its efficiency (touchless processing, on-time payment, capturing discounts) directly affects cost and supplier relationships.

Example

AP processes 3,000 invoices a month, auto-matching 85% and manually handling the exceptions.

Related terms

• Invoice — A supplier's bill requesting payment for goods or services delivered, itemising what was supplied and the amount due.
• Three-Way Matching — An invoice-control check comparing the purchase order, the goods-receipt record and the supplier invoice before payment.
• Payment Terms — The agreed conditions for when and how a buyer pays a supplier, such as 'net 30 days' from invoice date.
• Duplicate Payment — Paying the same invoice more than once, usually due to data errors, duplicate vendors or weak controls.

Related concepts

• Procure-to-Pay (P2P) — The end-to-end operational buying cycle — from requisition and approval to purchase order, receipt, invoice matching and payment.

Frequently Asked Questions

What is Accounts Payable (AP)?

The function and ledger responsible for recording and paying what a business owes its suppliers. AP receives, matches and pays supplier invoices and manages payment timing. It sits at the end of the procure-to-pay cycle, and its efficiency (touchless processing, on-time payment, capturing discounts) directly affects cost and supplier relationships.

Can you give an example of Accounts Payable (AP)?

AP processes 3,000 invoices a month, auto-matching 85% and manually handling the exceptions.

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