Accounts payable (AP) are bills to be paid as part of the normal course of business.
This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive goods or services from a vendor, receive an invoice, and until that invoice is paid the amount is recorded as part of “accounts payable.”
Be sure to read up on accounts receivable as well, and check out How to Read Your Business’s Balance Sheet and The Key Elements of the Financial Plan.
At Bplans, it's our goal to make it easy for you to start and run your business. The Bplans glossary of common business terms will help you learn about key small business and entrepreneurship topics.
