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AP
(Accounts Payable)
AP (Accounts Payable) represents the money a company owes to suppliers or vendors for goods/services received but not yet paid for. This current liability appears on the balance sheet and is crucial for managing cash flow and working capital.
Effective AP management involves tracking payment terms (like net-30 or net-60), taking advantage of early payment discounts, and maintaining good supplier relationships. Large corporations often use automated AP systems to process thousands of invoices monthly. The AP process is closely related to AR (Accounts Receivable), and together they form the core of a company's short-term liquidity management under GAAP standards.
Effective AP management involves tracking payment terms (like net-30 or net-60), taking advantage of early payment discounts, and maintaining good supplier relationships. Large corporations often use automated AP systems to process thousands of invoices monthly. The AP process is closely related to AR (Accounts Receivable), and together they form the core of a company's short-term liquidity management under GAAP standards.