What is Accounts payable?
Accounts payable (AP) is the money a company owes suppliers for goods and services bought on credit, and the finance function that receives, approves and pays those invoices.
In more detail
On the balance sheet, AP is a current liability. As a team, AP runs the invoice cycle: receive the invoice, capture the data, match it to a purchase order and receipt, code it to the right accounts, route it for approval and schedule payment. Each step carries risk: duplicate payments, fraud such as altered bank details, missed early-payment discounts and late fees. Month-end close depends on AP being complete, because unposted invoices turn into accruals. Automation concentrates on capture, matching, coding and exceptions, while people keep approvals and changes to the vendor master. Days payable outstanding (DPO) measures how long the company takes to pay. Software for the job has its own entry under AP automation.
Example
For example, a company receives 1,500 supplier invoices a month, mostly as emailed PDFs. The AP team reads each one, matches it to a PO, codes it and sends it to the budget owner. Unmatched invoices wait in a shared queue.