Leasing - Equipment mandatory for the business can also be leased instead of bought, so leasing invoices qualify as accounts payable.In case that equipment is purchased from a third party and not paid until the end customer pays for service, then that equipment also falls under AP category. Products and Equipment - Some businesses require a certain infrastructure to supply their clients with a service.Transportation and Logistics - Many companies outsource their transportation and logistics needs to specialized firms, and those costs are recorded as accounts payable.Power / Energy / Fuel - Typical utility bills are also accounts payable because their consumption is prior to the payment.Raw materials - Especially in manufacturing industries where large amounts of materials are used to finish the production process it is impossible to buy the entire supply with instant payment, so those items are shown in the books as account payable.Depending on your business needs, a vast array of items can be purchased, but most commonly examples of AP include some of the following: Examples of Accounts PayableĪccounts payable item is recorded in company’s books every time when a vendor or supplier issues an invoice that has not yet been paid. These teams usually do their work manually, with some taking a step further and implementing automated solutions for a seamless workflow. The term AP is also used as a name for the accounts payable department - a financial sublet that manages AP processes. Well-organized and accurate accounts payable records are crucial to the company’s financials, as they affect cash flow and liquidity. The sum of all accounts payable is represented on a balance sheet as a current liability up until the moment the transaction is finished with payment. ![]() Since those purchased items are usually paid with a delay of 30 up to 90 days, it is the money that the company owes. Accounts payable (AP) is a commonly used financial term that describes short-term debt and obligations to company’s vendors or suppliers for the goods and services bought on credit.
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