Every invoice that lands in your inbox becomes, once approved, an account payable: an amount you owe, with a due date attached. AP is the running total of them all, and it sits on the balance sheet as a current liability.
AP and AR are the same invoices seen from opposite sides of the table. Your supplier’s receivable is your payable; when you pay, both records clear at once.
Why It Matters
For anyone who sends invoices, understanding AP explains what happens to them: your invoice enters the client’s payable queue, gets matched against any purchase order, waits for an approval, and is scheduled for a payment run. Payment timing is usually about their AP process, not their opinion of you — which is why quoting PO numbers and invoicing cleanly speeds payment more than chasing does.
Example
A café receives a $500 supplies invoice on Net 30 terms. Its bookkeeper records a $500 payable, schedules it for the month-end payment run, and pays on day 28. From receipt to payment, that $500 sat in accounts payable.
Frequently Asked Questions
Is accounts payable a debit or a credit?
AP is a liability account, so it increases with a credit (when an invoice is recorded) and decreases with a debit (when it is paid).