What are Accounts Payable (AP)?
Accounts Payable (AP) is a current liability on a company’s balance sheet representing the amounts the company owes to suppliers and creditors for goods or services received but not yet paid. AP is recorded when an invoice is approved and removed when payment is made.
AP management — payment timing, supplier terms, early-payment discounts — directly affects working capital and supplier relationships. In startups, automated AP systems (Bill.com, Tipalti, Ramp) reduce manual processing and provide audit trails important for fundraising and tax compliance.