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Try now for FreeMakersHub automates and simplifies accounts payable (AP) for businesses with complex operations and high payment volumes. Our solution streamlines bill capture, coding, approval routing, and payment processing, giving finance teams real-time visibility into project costs and cash flow. Learn more today.
Accounts payable (AP) is the lifeblood of every finance team but the terminology can get dense. From invoice automation to three-way matching, understanding key AP terms helps accountants, bookkeepers, and finance leaders manage payables with precision and confidence.
This glossary breaks down 25 essential accounts payable terms, written in clear, plain language and aligned with how modern AP automation platforms like MakersHub operate today.
Whether you’re training a new staff member, exploring automation, or just want a refresh, this is your go-to reference for mastering AP.
The total amount a business owes to its vendors or suppliers for goods and services received but not yet paid for. AP sits as a liability on the balance sheet and represents short-term debt.
The process of using software to manage invoice intake, approval routing, and payment execution automatically. MakersHub’s AI-driven automation eliminates manual data entry, saving finance teams hours each week.
The sequence of steps that an invoice follows from receipt to payment including data capture, coding, approvals, and reconciliation. Well-designed workflows ensure accuracy and prevent bottlenecks.
A report that categorizes outstanding payables based on how long they’ve been due, commonly shown in 30, 60, and 90-day intervals. It’s essential for managing cash flow and identifying overdue payments.
A predefined process that determines which stakeholders must review or approve invoices before payment. MakersHub lets you configure approval rules by vendor, department, or project for total control.
A chronological record of every action taken in the AP process from who approved a bill to when a payment was sent. Automation tools automatically maintain this trail, ensuring compliance and transparency.
The process of collecting and digitizing bills from multiple sources (email, uploads, photos). With MakersHub, all bills flow into a single inbox where AI reads and structures them automatically.
A common challenge in AP where invoice data is inconsistent, incomplete, or formatted differently across vendors. MakersHub solves this by extracting, labeling, and coding every line item accurately.
A control mechanism that identifies and blocks duplicate invoices from being processed or paid twice: critical for fraud prevention and audit integrity.
A financial incentive offered by vendors to encourage faster payment (for example, “2/10, net 30” means a 2% discount if paid within 10 days). Automation helps capture these savings consistently.
The electronic movement of funds from one account to another, such as ACH payments. EFTs are faster, more traceable, and more secure than paper checks.
Assigning each invoice or expense to the correct GL account, cost center, or project. MakersHub automates GL coding using AI trained on vendor and transaction patterns.
The step where an invoice is reviewed and authorized for payment. In manual systems, this often requires multiple email threads; automation keeps it structured and traceable.
The end-to-end handling of supplier invoices, including data entry, validation, approval, and payment. Automating this process reduces errors and accelerates cycle times.
The ability of an automation platform to read and structure data from each individual product or service line on an invoice not just the total amount. MakersHub’s WiseVision AI performs full line-level extraction for complete accuracy.
Matching ensures that an invoice corresponds with the correct purchase order and receipt.
The ability to manage payables across multiple business entities or subsidiaries from a single platform. MakersHub’s workflows support entity-specific approvals and reporting.
Technology that converts printed or scanned text into digital data. While basic OCR can extract headers, advanced AI systems like MakersHub go further: interpreting the context and structure of invoices.
The formal approval step before funds are released. Separating validation from payment authorization reduces errors and enhances internal controls.
A document issued by a buyer authorizing a vendor to supply goods or services. PO matching ensures that what’s billed aligns with what was ordered and received.
The process of ensuring that payment records in the AP system match the transactions in the accounting ledger or bank account. Automation provides real-time reconciliation for complete accuracy.
A communication sent to a vendor confirming that a payment has been made, detailing which invoices were paid and for how much. MakersHub automates these notifications without requiring vendor logins.
The ability to see where money is going in real time across vendors, categories, and departments. Full visibility helps finance leaders make informed, proactive decisions.
The process of maintaining vendor information, payment terms, and communications. Centralized vendor data ensures accurate payments and smoother collaboration.
MakersHub’s proprietary AI technology for document processing. It combines computer vision, language models, and adaptive learning to extract, structure, and code invoices with unmatched accuracy.
Understanding these core AP terms isn’t just academic: it’s how accounting professionals align accuracy, compliance, and efficiency.
When teams grasp the difference between basic OCR and AI-based extraction, or between invoice validation and payment authorization, they make better software decisions and operate with more control.
Finance leaders who use this glossary as a shared resource help their teams:
MakersHub brings all of these concepts to life in one intelligent platform. By addressing the clean data problem and automating invoice processing from capture to payment, MakersHub makes AP efficient, scalable, and stress-free.
With line-item extraction, configurable approvals, and real-time reconciliation, finance teams can focus less on transactions and more on strategic financial management.
Explore how MakersHub powers automation across every AP term in this glossary. Schedule a demo or visit our customer case studies to see real-world outcomes.
What is accounts payable in accounting?
Accounts payable represents the money a company owes to suppliers for goods or services received but not yet paid. It’s recorded as a short-term liability.
Why is invoice automation important?
Invoice automation saves time, reduces errors, and improves visibility by handling data extraction, approval routing, and payment automatically.
What is the difference between a bill and an invoice?
An invoice is issued by a vendor requesting payment; a bill is the same document from the buyer’s perspective.
How does three-way matching prevent errors?
Three-way matching compares the invoice, purchase order, and receipt to ensure accuracy and prevent overpayments or fraud.
What is an AP automation platform?
An AP automation platform like MakersHub digitizes and streamlines the entire accounts payable process, integrating directly with accounting systems for real-time accuracy.
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