Money a business owes to others for goods or services it has received but not yet paid for — its outstanding bills.
Accounts payable (AP) is the money your business owes others — subcontractors, software vendors, suppliers — for things you’ve received but haven’t paid for yet. It’s the mirror image of accounts receivable: your outstanding bills rather than what’s owed to you.
For sellers, AP is usually small for solo freelancers, but it grows once you hire subcontractors or carry real tool costs. Managing it well means paying on time without draining your account before client payments arrive — a cash flow timing game. For buyers who work with multiple vendors, AP is simply the list of freelancers and suppliers you owe.
The discipline that matters is not paying too early or too late. Paying the moment a bill arrives can leave you short if your own invoices haven’t cleared; paying late damages the relationships you depend on. Tracking what’s due and when — even in a simple spreadsheet — keeps you from managing your business by whatever the bank balance happens to say today.