Accounts payable: how to track what you owe your suppliers
Accounts payable (AP) is the money your business owes suppliers for goods or services you have received but not yet paid for. Every bill you accept on credit — "Net 30" from a wholesaler, a monthly invoice from a contractor — sits in accounts payable until you pay it. Tracking it well means you pay on time, keep your supplier terms, and never pay the same invoice twice. Below: the meaning in plain words, an accounts payable spreadsheet with formulas, an aging report example, a weekly routine, and the apps that keep a ledger per supplier — including Account Ledger by Ofisx on iPhone.
Short answer
- Meaning: accounts payable is what you owe suppliers on credit. It is a liability on the balance sheet; the supplier sees the same amount as their accounts receivable.
- Debit or credit: a new bill is a credit to accounts payable (it goes up); a payment to the supplier is a debit (it goes down). A normal AP balance is a credit balance.
- Spreadsheet: one row per supplier bill with bill date, due date, amount, paid and balance; formulas give days until due and an aging bucket (layout below).
- Software: BILL, QuickBooks and Zoho Books handle accounts payable inside bill-pay or full accounting software; Account Ledger by Ofisx keeps a supplier ledger and a customer ledger side by side on the iPhone, with due-date alerts.
- The rule that saves the most money: match every bill to what you actually received before you put it in the payables list.
What accounts payable means
When a supplier delivers and lets you pay later, you have a short-term debt to that supplier. Add up all of those unpaid supplier bills and you get your accounts payable. It is the mirror image of accounts receivable: your supplier records the same bill as money owed to them.
Accounts payable covers trade credit for the business — stock, materials, services, rent invoiced monthly, utilities. It does not usually include bank loans, credit cards or payroll; those are tracked as separate liabilities.
| Accounts payable (AP) | Accounts receivable (AR) | |
|---|---|---|
| Who owes whom | You owe a supplier | A customer owes you |
| Balance sheet | Current liability | Current asset |
| New bill / invoice | Credit to AP (goes up) | Debit to AR (goes up) |
| Payment | Debit to AP (goes down) — cash goes out | Credit to AR (goes down) — cash comes in |
| Kept per | Supplier (vendor ledger) | Customer (client ledger) |
| Main risk | Late fees, lost terms, duplicate payments | Late payment, bad debt |
Most small businesses that buy on credit also sell on credit, so they track both sides. The customer side is covered in how to track accounts receivable.
Accounts payable spreadsheet: layout and formulas
A simple accounts payable spreadsheet in Excel or Google Sheets has one row per supplier bill. Put headers in row 1 and start data in row 2:
| Column | Header | What goes in / formula (row 2) |
|---|---|---|
| A | Supplier | Same spelling every time (use a drop-down list) |
| B | Bill number | The supplier's invoice number — your duplicate check |
| C | Bill date | Date on the supplier invoice |
| D | Terms (days) | 30 for Net 30, 15 for Net 15, 0 for due on receipt |
| E | Due date | =C2+D2 |
| F | Amount | Bill total |
| G | Paid | Total paid so far (partial payments add up here) |
| H | Balance | =F2-G2 |
| I | Days until due | =IF(H2>0,E2-TODAY(),"") — negative means overdue |
| J | Aging bucket | =IF(H2<=0,"Paid",IF(I2>=0,"Current",IF(I2>=-30,"1–30",IF(I2>=-60,"31–60","60+")))) |
Total owed to one supplier: =SUMIFS(H:H,A:A,"Hartley Supply"). Everything due in the next 7 days: =SUMIFS(H:H,I:I,">=0",I:I,"<=7"). Duplicate check on the bill number: =COUNTIFS(A:A,A2,B:B,B2)>1 in a helper column, highlighted with conditional formatting.
A free copy of this layout works for a few dozen bills a month. Past that, the usual problems are partial payments typed over the old figure, two people paying the same bill, and no history per supplier — the reasons small businesses move to a ledger app or accounting software.
Accounts payable aging report example
An accounts payable aging report groups what you owe by how long each bill has been due. Example as of October 31, 2026:
| Supplier | Current (not yet due) | 1–30 days past due | 31–60 days | 60+ days | Total owed |
|---|---|---|---|---|---|
| Hartley Supply (building materials) | $3,200 | $1,150 | $4,350 | ||
| Northline Packaging | $860 | $860 | |||
| Riverside Electric (contractor) | $1,400 | $600 | $2,000 | ||
| Brook Office Lease | $1,750 | $1,750 | |||
| Delta Freight | $320 | $320 | |||
| Total | $5,810 | $2,550 | $600 | $320 | $9,280 |
How to read it: $5,810 (63%) is not due yet, so it goes into next month's cash plan. The $2,550 in 1–30 days should be paid or agreed with the supplier this week. Riverside's $600 at 31–60 days and Delta's $320 at 60+ days are worth a closer look — old payables are often a disputed bill, a missing credit note or an invoice that was already paid and never recorded.
Before paying an old line, check the supplier's own statement of account against your ledger. Differences found that way are cheaper than a duplicate payment.
Accounts payable process: a weekly routine for a small business
- Receive the bill and file it the same day — paper or photo, never left in an inbox.
- Match it to what arrived: the delivery note or the work done, quantity and price. Short deliveries and wrong prices are fixed now, not after payment.
- Record it in the supplier's ledger with bill number, date, terms and due date.
- Plan once a week: list everything due in the next 7–14 days and compare it with the cash you expect to collect.
- Pay and record the payment against the specific bill (or as a partial payment) the same day, with the method and reference.
- Reconcile each main supplier monthly: their statement vs your ledger. Agree the balance in writing — see how to reconcile an account.
Two numbers help: days payable outstanding (DPO) = average accounts payable ÷ cost of goods sold × 365, which shows how long you take to pay on average; and the share of bills paid after the due date. A DPO close to your suppliers' terms with few late bills is the healthy pattern. Paying much earlier than the terms only makes sense when the supplier offers an early-payment discount (for example, "2/10 Net 30" = 2% off if paid within 10 days).
Ways to track accounts payable compared
| Option | Best for | Accounts payable kept as | Paying suppliers | Platforms | US App Store ratings (Oct 21, 2026) |
|---|---|---|---|---|---|
| Account Ledger by Ofisx | Small businesses that buy and sell on credit and want both sides on the phone | One card per supplier and per customer: purchases on credit, payments out, partial payments, returns, running balance | Records payments you make elsewhere (bank, check, cash); does not move money | iPhone (US App Store); Android on Google Play in Turkey only | New in the US store — no ratings yet |
| BILL AP & AR Business Payments | Businesses that want bill approval and payment in one place | Bills captured, approved and scheduled for payment | Pays suppliers from the platform (ACH, check and other methods per plan) | iPhone, Android, web | 48,761 ratings, 4.9 |
| Intuit QuickBooks | Businesses whose books are in QuickBooks | Bills and vendor balances inside full accounting books | Bill pay options depend on the plan | iPhone, Android, web | 272,947 ratings, 4.7 |
| Zoho Books | Small businesses keeping full books in Zoho | Bills and vendor balances inside full accounting books | Records vendor payments; payment options depend on region and plan | iPhone, Android, web | 5,260 ratings, 4.8 |
| Excel / Google Sheets | A few suppliers and a few dozen bills a month | One row per bill with the formulas above | You pay elsewhere and type the payment in | Any computer | — |
The options in detail
Account Ledger by Ofisx
Account Ledger keeps a vendor ledger for every supplier next to the client ledger for every customer. Each purchase on credit, payment out, partial payment or return goes in as one line and the supplier balance updates itself; due-date alerts show what is coming up or overdue. You can share a supplier's ledger as a PDF statement to compare balances, and export everything to Excel for your accountant.
It is a ledger app, not bill-pay or full accounting software: it does not pay bills, scan invoices, or keep a general ledger.
BILL AP & AR Business Payments
BILL is built around the accounts payable workflow: bills come in, go through approval and are paid from the platform, with sync to accounting software. Best when several people approve bills or you want to pay suppliers electronically from one tool.
Intuit QuickBooks
QuickBooks records bills against vendors, shows what is due and produces A/P aging reports as part of full bookkeeping. Best when your accountant already works in QuickBooks.
Zoho Books
Zoho Books tracks bills, vendor payments and payables aging inside a full accounting package, alongside invoicing and receivables.
Excel / Google Sheets
Free if you already have the software, and fully under your control. Keep the duplicate-check column and one person responsible for entering payments.
How to keep accounts payable under control
- Match before you record — A bill enters accounts payable only after it matches what you received. Price and quantity errors are easiest to fix before payment.
- Record the supplier's bill number — It is the simplest protection against paying the same invoice twice, especially when the supplier sends a copy or a reminder.
- Pay against a specific bill — Note which bill each payment settles. Unallocated payments are what make supplier balances disagree at the end of the month.
- Look ahead one or two weeks — Plan payments from the due dates, not from whichever supplier calls first, and compare with the money you expect to collect from customers.
- Reconcile with the supplier monthly — Ask the main suppliers for a statement and compare it line by line with your ledger; agree the balance in writing.
- Use early-payment discounts when they pay — "2/10 Net 30" is worth taking when you have the cash; otherwise pay on the due date and keep the money working.
Limits — what Account Ledger does not do
- Account Ledger does not pay bills, move money, scan invoices or connect to your bank; it records purchases and payments you make.
- There is no general ledger, payroll or tax return in the app, and no ready-made bucketed aging report — balances and due dates are per supplier; the aging table above is made in a spreadsheet.
- In the US the app is on the App Store for iPhone; the Android version is on Google Play in Turkey only for now.
- It is a paid subscription after the free trial; the App Store shows current plans and prices.
Frequently asked questions
What is accounts payable?
Accounts payable is the money a business owes its suppliers for goods or services received on credit and not yet paid. It is a current liability on the balance sheet.
Is accounts payable a debit or a credit?
Accounts payable normally has a credit balance. A new supplier bill is credited to accounts payable; a payment to the supplier is debited to it.
Is accounts payable an asset or a liability?
A liability. It is money you owe. The same bill is an asset (accounts receivable) in the supplier's books.
What is the difference between accounts payable and accounts receivable?
Accounts payable is what you owe suppliers; accounts receivable is what customers owe you. AP is kept per supplier in vendor ledgers, AR per customer in client ledgers.
How do I track accounts payable in Excel?
Use one row per bill with supplier, bill number, bill date, terms, due date (=bill date + terms), amount, paid and balance (=amount − paid). Add days until due with =E2-TODAY() and an aging bucket with nested IF, then total with SUMIFS.
What is an accounts payable aging report?
A table that groups unpaid supplier bills by how overdue they are — current, 1–30, 31–60 and 60+ days — per supplier and in total. It shows what to pay first and which old bills need checking.
Is there an app to track what I owe suppliers?
Yes. BILL, QuickBooks and Zoho Books handle payables inside bill-pay or accounting software. Account Ledger by Ofisx keeps a ledger per supplier and per customer on the iPhone with running balances and due-date alerts, with a free trial and then a subscription.