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Accounts

Accounts payable

Accounts payable is money a business owes vendors for goods or services already received.

Reviewed by the Booksmrt bookkeeping teamLast reviewed 2026-07-27

How it works in the books

An accounts payable process records bills, due dates, payments, credits, and aging. It is most visible in accrual-basis books.

Example

A supplier invoice received in June and paid in July remains in accounts payable at June 30.

What can go wrong

Entering a bill and later coding the bank payment directly to expense can record the same expense twice.

Compare Accounts payable

Accounts payable vs. accounts receivableAccounts payable tracks obligations to vendors; accounts receivable tracks claims against customers. Both are balance-sheet accounts and both require invoice-level matching under accrual accounting.

Sources

Educational information only. Booksmrt provides bookkeeping services, not tax, legal, audit, or investment advice. Confirm material accounting and tax decisions with the appropriate professional.