Accounts payable
Accounts Payable (AP) is the FI sub-ledger for managing what the organisation owes its vendors, recording vendor invoices, processing payments, and reconciling to the general ledger. It is the finance side of procure-to-pay.
AP is the finance end of procure-to-pay: MM invoice verification creates the AP liability, which AP then pays.
- AP records vendor invoices (often via MM invoice verification), manages due dates and payment terms, runs the payment program to…
- Vendor invoices: posting liabilities (direct FI or from MM).
- Payment run (F110): automatic payment of due invoices.
- Watch out: Duplicate invoices without duplicate checks.
What AP does
AP records vendor invoices (often via MM invoice verification), manages due dates and payment terms, runs the payment program to pay vendors, and keeps the vendor sub-ledger reconciled to the G/L. It ensures suppliers are paid correctly and on time and that liabilities are accurate.
Key processes
- Vendor invoices: posting liabilities (direct FI or from MM).
- Payment run (F110): automatic payment of due invoices.
- Payment terms & discounts: managing due dates and cash discount.
- Vendor master (Business Partner): the key data.
Integration
AP is the finance end of procure-to-pay: MM invoice verification creates the AP liability, which AP then pays. It reconciles automatically to the G/L, and payment posts to bank accounting. Clean vendor master data (BP) underpins it all.
Common pitfalls
- Duplicate invoices without duplicate checks.
- Wrong payment terms costing discounts or paying late.
- Vendor master issues blocking payment.