What is Accounts payable (AP)?

Accounts payable (AP) is the money a business owes suppliers and vendors for goods or services it has not yet paid for. Accounts payable are recorded as a liability on the balance sheet until payment is made.

Example: A supplier sends a $500 invoice due in 30 days. Until the invoice is paid, the amount is recorded in accounts payable.

Related terms: Accounts Receivable, Bill Pay, Liabilities, Cash Flow