Accounts payable (AP)
Also called payables
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is accounts payable (AP)?
Accounts payable (AP) is the money a company owes its suppliers for goods and services it has received but not yet paid for. For a distributor, AP is mostly what it owes manufacturers for inventory.
Accounts payable (AP) example
A supplier’s invoice for $50,000 of pipe on net 60 terms passes three-way match and stays in accounts payable until the distributor pays it.
Related terms
- Accounts receivable (AR)Accounts receivable (AR) is the money customers owe a company for goods already delivered and invoiced but not yet paid for.
- Three-way matchThree-way match is an accounts payable check that compares a supplier’s invoice with the purchase order and receiving record before the invoice is paid.
- Net termsNet terms are payment terms that give a business customer a set number of days after the invoice date to pay the full amount, such as net 30 or net 60.
- Cost of goods sold (COGS)Cost of goods sold (COGS) is the cost of the products a company sold during a period.
