Definition
Accounts payable (AP) is the money a business owes its suppliers for goods or services received on credit and invoiced but not yet paid.
What is accounts payable in practice?
AP is a liability. It increases when a supplier invoice is recorded and decreases when the supplier is paid. Good AP control means recording invoices only for goods actually received at agreed prices, paying on time to protect supplier terms, and never paying the same invoice twice.
Example: a trader records a supplier invoice for GBP 11,340 including VAT on 30-day terms, and it sits in AP until paid.
AP aging, like AR aging, groups unpaid bills by due date. Goods received but not yet invoiced aren’t in AP; they sit in a separate accrual account, goods received not invoiced.