Accounts payable (AP) is an essential business function that affects profitability and operations throughout an organization. It is the total amount owed by an organization to suppliers and vendors for goods and services purchased. The AP process is responsible for paying suppliers and vendors for goods and services purchased by the company. The AP process can be broken down into four steps, although the complexity and length of each may differ from company to company:

• Receiving the invoice
• Reviewing the invoice
• Approving the invoice
• Paying suppliers or vendors

The end-to-end AP process includes maintaining the master vendor file, receiving vendor invoices, coding or uploading invoices into a financial or accounts payable automation system, verifying and matching invoices, routing for approval, and processing payments. Other accounts payable processes include maintaining internal controls from identifying duplicate or fraudulent invoices, preventing duplicate payments, and accounts payable audits. AP automation streamlines the accounts payable process from invoice capture to payment execution and keeps information up-to-date and ready to use.

The efficiency and productivity of an AP department are dependent on how its employees can manage the procure-to-pay cycle in a timely manner. A well-managed AP department ensures a strong relationship with suppliers and vendors, timely payments, and accurate financial records. Accounts payable is considered to be a source of cash, meaning that if accounts payable is managed properly, organizations can take advantage of supplier agreements and increase cash flow and cash on hand.