--- title: Accounts Payable (AP): Definition and Process | Aavenir url: https://aavenir.com/glossary/accounts-payable-ap/ description: Accounts payable is the money a business owes suppliers for goods and services received but not yet paid, shown as a liability, and the team that pays it. updated: 2026-11-07 --- [Home](https://aavenir.com/) / [Resources](https://aavenir.com/resources/) / [Glossary](https://aavenir.com/glossary/) / Accounts payable Glossary # What is accounts payable? Accounts payable is the money a business owes suppliers for goods and services received but not yet paid, shown as a liability, and the team that pays it. ## Two meanings - **The balance.**The total of unpaid supplier invoices, recorded as a current liability on the balance sheet. - **The function.**The team that receives, checks, approves and pays supplier invoices on time and correctly. Accounts payable differs from [notes payable](https://aavenir.com/glossary/notes-payable/), which are formal written promises to repay borrowed money with interest. ## How the process works - Receive the supplier invoice - Capture and check its details - Match it to the purchase order and receipt - Route it for [approval](https://aavenir.com/glossary/invoice-approval/) - Schedule payment within the agreed terms - Record the payment and update the balance Management may choose to pay close to the due date to keep cash longer, or early to take a discount. Either way, accurate and timely payment protects supplier relationships. ## How Aavenir handles it [Invoiceflow](https://aavenir.com/solutions/accounts-payable-automation/) automates accounts payable around the contract: it captures invoices, matches them to orders and receipts, and checks rates, discounts and tax terms against the signed contract. Exceptions go to a person before payment. ## Measures worth tracking - Invoices paid on time - Time from invoice receipt to approval - Share of invoices matched on the first pass - Early payment discounts taken - Duplicate or incorrect payments found ## Keep reading [Accounts payable automation Accounts payable automation uses software to capture supplier invoices, extract their data, match them to orders and route approvals with little manual entry. Read more](https://aavenir.com/glossary/ap-automation-apa/)[Invoice approval Invoice approval is reviewing and authorizing a supplier invoice before it is recorded and paid, to confirm the goods or services arrived at the agreed price. Read more](https://aavenir.com/glossary/invoice-approval/)[Notes payable Notes payable are written promises to repay borrowed money with interest by a set date, recorded as a liability on the borrower's balance sheet until they are paid. Read more](https://aavenir.com/glossary/notes-payable/) Frequently asked questions (FAQ) ## Common questions ### ### Is accounts payable an asset or a liability? A liability. It is money the business owes to suppliers, usually due within a year, so it is listed under current liabilities. It is reported on the balance sheet. [Read about notes payable](https://aavenir.com/glossary/notes-payable/). ### ### What is the difference between accounts payable and accounts receivable? Accounts payable is what you owe suppliers. Accounts receivable is what customers owe you. One is a liability, the other an asset. Both affect working capital. [Read about accounts payable automation](https://aavenir.com/glossary/ap-automation-apa/). ### ### How can accounts payable avoid overpaying suppliers? Match each invoice to the order, the receipt and the contract terms, check for duplicates and route exceptions to a person before payment. A clean supplier record helps too. [See Invoiceflow](https://aavenir.com/solutions/accounts-payable-automation/). Have a question we have not answered? [Ask the Expert](https://aavenir.com/contact/) Schedule a demo ## See your contracts run on one record. - **1****A 30 minute walkthrough**Built around your team, whether that is procurement, legal, IT or finance. - **2****Your contracts, not ours**Bring a few sample agreements and watch Aavenir AI extract and review them. - **3****ServiceNow or standalone**We show the deployment that fits the systems you already run. Prefer to talk first? [Contact the team](https://aavenir.com/contact/). The form did not load. [Contact the team](https://aavenir.com/contact/) instead, or refresh the page.