Accounts payable is the part of a business that turns a supplier's invoice into a payment, and the reason it is harder than that sentence suggests is that the invoice is only one of three documents involved. There is what was ordered, what actually arrived, and what you are being asked to pay for, and the whole function exists to establish that those three agree before anybody parts with money. Everything else is filing, chasing and record keeping around that one check.
The six steps, in the order they happen
A purchase order goes to a supplier. Goods or services arrive and somebody records that they did, which is the goods receipt. The supplier sends an invoice. The invoice is matched against the order and the receipt. Somebody with authority approves it. It is scheduled and paid, and a remittance advice tells the supplier which invoices the payment covers. Small teams run all six informally; large teams run the same six with more people and more handoffs, which is where they slow down.
Where the work actually piles up
Two steps, consistently. The match, because the three documents disagree more often than anyone plans for: a price that changed, a partial delivery, a unit of measure that differs between the order and the invoice. And the approval, because it is the one step performed by somebody who does not work for accounts payable and has no reason to prioritise it. Both are chasing problems rather than accounting problems, and both are why a payables team is measured on how many invoices it clears rather than how well it books them.
What accounts payable is not
It is not purchasing, which decides what to buy and issues the order, though the two are joined at the purchase order. It is not accounts receivable, which is the mirror image and chases money in rather than out. It is not general ledger accounting, which decides how a transaction is classified and reported. Payables owns the stretch between an invoice arriving and a payment leaving, and that boundary matters because most of the friction sits exactly where the function hands off to another one.
Questions people ask about accounts payable
What is the difference between accounts payable and accounts receivable?
Payables is money you owe suppliers; receivables is money customers owe you. They are structurally similar processes pointing in opposite directions, and they are usually run by different people because the incentives are opposite: payables is measured on control and accuracy, receivables on speed of collection.
Is accounts payable an asset or a liability?
A liability. It is money owed and not yet paid, so it sits on the balance sheet as an obligation. How any particular invoice should be classified or accrued is a question for your accountant, not for this page.
How many people does an accounts payable team need?
It depends almost entirely on invoice volume and on how many of your invoices have a purchase order behind them, because an invoice with an order and a receipt to match against can clear with far less human attention than one without. Work it from your own volumes rather than from a headcount benchmark.