What are Accounts Payable?

Any time one of your vendors allows you to pay an invoice after the goods are shipped or the service is performed, you have accounts payable (AP).  Just like it sounds AP represents accounts you need to pay or money that you owe to your vendors.  Typical AP terms are that payment is due within 30 days of the date of the invoice; however, there is no rule about the length of time a vendor may allow you to pay an invoice.  In fact in some industries 120-180 days are the norm.  Every vendor can create their own payment terms and many use that as a competitive advantage.

For more detailed information, see the blog post by Wray Rives here: http://bottomline.outright.com/bookkeeping/what-are-accounts-payable/

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