Understanding AP and AR: A Simple Guide

💼 Top 10 Accounts Payable Q&A 🔹 Accounts Payable (AP) is one of the most important functions in finance. Here are the most common interview & practical questions every AP professional should know: 1️⃣ What is Accounts Payable? – Money owed to vendors, shown as liability. 2️⃣ Full Cycle of AP – Invoice → Verification → Approval → Payment → Reconciliation. 3️⃣ 3-Way Match – PO, Goods Receipt, Invoice. 4️⃣ AP vs AR – AP = liability, AR = asset. 5️⃣ Key AP Documents – PO, GRN, Invoice, Debit/Credit Notes, Payment Vouchers. 6️⃣ AP Controls – Segregation of duties, approvals, reconciliation. 7️⃣ Payment Terms – Net 30, Net 60, 2/10 Net 30. 8️⃣ Duplicate Invoice Handling – ERP validation, PO matching, flagging duplicates. 9️⃣ Vendor Reconciliation – Matching vendor statements with AP ledger. 🔟 AP KPIs – DPO, processing time, discounts captured, error rate. ✨ Mastering these Q&A will boost your finance career & interview prep! ⸻ #AccountsPayable #Accounting #FinanceCareers #InterviewPrep #AP #Finance #accounts

Let’s break down Accounts Payable (AP) and its pay cycle... 📘 What Is Accounts Payable? Accounts Payable refers to the money a business owes to its suppliers or vendors for goods and services received but not yet paid for. It’s a key part of the liability section on the balance sheet. The Accounts Payable Cycle (Pay Cycle) 1. Purchase Order (PO) Issued - The company sends a PO to the vendor detailing items, quantities, and agreed prices. 2. Goods/Services Received - The vendor delivers the goods or services. A receiving report is created to confirm delivery. 3. Invoice Received - The vendor sends an invoice requesting payment. 4. Three-Way Match - The AP team matches the PO, receiving reports, and invoices to verify accuracy. 5. Invoice Approval - Once verified, the invoice is approved for payment. 6. Payment Processed - Payment is made via check, ACH, wire transfer, or other methods. 7. Record Keeping - The transaction is recorded in the accounting system for audit and reporting. This cycle ensures vendors are paid accurately and on time, while maintaining financial control. hashtag #accountspayable hashtag #payable hashtag #ap hashtag #accounting hashtag #accounts hashtag #learning hashtag #topic hashtag #accountants hashtag #accountant hashtag #finance hashtag #education hashtag #career hashtag #accountsjob hashtag #accountscareer

Top 10 Accounts Payable Q&A 🔹 Accounts Payable (AP) is one of the most important functions in finance. Here are the most common interview & practical questions every AP professional should know: 1️⃣ What is Accounts Payable? – Money owed to vendors, shown as liability. 2️⃣ Full Cycle of AP – Invoice → Verification → Approval → Payment → Reconciliation. 3️⃣ 3-Way Match – PO, Goods Receipt, Invoice. 4️⃣ AP vs AR – AP = liability, AR = asset. 5️⃣ Key AP Documents – PO, GRN, Invoice, Debit/Credit Notes, Payment Vouchers. 6️⃣ AP Controls – Segregation of duties, approvals, reconciliation. 7️⃣ Payment Terms – Net 30, Net 60, 2/10 Net 30. 8️⃣ Duplicate Invoice Handling – ERP validation, PO matching, flagging duplicates. 9️⃣ Vendor Reconciliation – Matching vendor statements with AP ledger. 🔟 AP KPIs – DPO, processing time, discounts captured, error rate. ✨ Mastering these Q&A will boost your finance career & interview prep!

💡 What is AP & AR? Key Points for Accounting Professionals Accounts Payable (AP): AP refers to the money a business owes to suppliers or vendors for goods or services bought on credit. It’s shown as a current liability on the balance sheet and represents obligations that need to be settled, usually within 30 to 90 days. Accounts Receivable (AR): AR is the money owed to the business by customers who purchased goods or services on credit. It’s recorded as a current asset on the balance sheet and reflects future cash inflows expected from clients. Important Points for AP & AR Jobs: For Accounts Payable (AP): Verify invoices against purchase orders before processing. Track payment terms to avoid late fees and optimize cash flow. Maintain clear records and support documents for every transaction. Avoid duplicate payments by keeping detailed reconciliations. Segregate duties: one person pays, another approves, for fraud control. For Accounts Receivable (AR): Promptly send invoices to clients after delivering goods or services. Monitor aging reports and follow up on overdue accounts. Record payments accurately and match them with invoices. Set up a provision for doubtful debts to account for uncollectible receivables. Communicate professionally with customers to resolve disputes or delays. AP and AR teams play a critical role in managing cash flow, reducing risks, and ensuring smooth operations. Stay organized and consistent for success! #Accounting #AccountsPayable #AccountsReceivable #Finance #CashFlow #BusinessTips

🔍 Top 10 Accounts Payable (AP) Interview Questions & Answers 📌 Essential for every accountant and finance professional! 1️⃣ What is Accounts Payable (AP)? ➡️ AP represents money a company owes suppliers for goods or services purchased on credit. It’s a short-term liability on the balance sheet. 2️⃣ What is the AP process? ✔ Receive Invoice ✔ Verify details (3-way match) ✔ Approve ✔ Record ✔ Pay 3️⃣ What is an Invoice? ➡️ A commercial document issued by a seller to request payment, including item details, price, and payment terms. 4️⃣ What is a Purchase Order (PO)? ➡️ A buyer-generated document confirming intent to purchase goods or services, outlining items, quantity, and agreed price. 5️⃣ What is 3-Way Matching? ➡️ A critical AP control process: 🔹 PO 🔹 Goods Receipt 🔹 Invoice ✅ All three must match before payment is made. 6️⃣ What is an Early Payment Discount? ➡️ A discount offered by suppliers for early payments. Example: 2/10, Net 30 → 2% off if paid within 10 days. 7️⃣ How do you prevent duplicate invoices? 🛡 Use invoice number tracking, AP software validations, vendor communication, and regular audits. 8️⃣ What is GRIR? ➡️ Goods Receipt / Invoice Receipt account — used to reconcile received goods with incoming invoices before payment. 9️⃣ What are common AP internal controls? 🔒 3-way match 🔒 Invoice approval workflow 🔒 Vendor master data checks 🔒 Duplicate payment prevention 🔟 How to resolve an invoice dispute? ✔ Investigate discrepancy ✔ Communicate with vendor ✔ Check supporting documents ✔ Resolve & document ✔ Update records 💬 Which of these AP processes or controls do you use in your role? Share your experience below! #AccountsPayable #FinanceJobs #AccountingTips #InterviewPrep #InvoiceProcessing #PurchaseOrder #GRIR #LinkedInFinance #AccountantsLife #FinanceProfessionals #CorporateFinance

💡 Key Activities in AP, AR & GL – The Heart of Finance Operations Ever wondered how the Finance & Accounts team keeps a business running smoothly? 🤔 It all comes down to the power trio in every Finance Business Process: 💰 Accounts Payable (AP) | 📥 Accounts Receivable (AR) | 📊 General Ledger (GL) Here’s a quick breakdown: ✅ AP (Accounts Payable) – Ensures timely payments to vendors and partners, managing cash flow and maintaining strong vendor relationships. Key Activities: Invoice Processing, Payment Processing, Vendor Reconciliation ✅ AR (Accounts Receivable) – Keeps cash flowing by invoicing clients and following up on payments. AR fuels business continuity and growth. Key Activities: Billing, Cash Application, Collections, Customer Reconciliation ✅ GL (General Ledger) – The backbone of financial reporting, recording and summarizing every transaction to ensure accuracy, compliance, and transparency. Key Activities: Chart of Accounts, Adjusting Journal Entries, Account Reconciliation, Month-End Close 🧠 Together, AP, AR & GL provide financial clarity, control, and confidence—empowering decision-makers and ensuring regulatory compliance. 💼 Huge respect to the F&A warriors working behind the scenes to make it all possible! hashtag hashtag#FinanceBusinessProcess hashtag#AP hashtag#AR hashtag#GL hashtag#FinanceAndAccounts hashtag#AccountsPayable hashtag#AccountsReceivable hashtag#GeneralLedger hashtag#ProcureToPay hashtag#OrderToCash hashtag#RecordToReport hashtag#FinanceTeam hashtag#BusinessProcess hashtag#BusinessOperations

ACCOUNTS PAYABLE CYCLE: THE BACKBONE OF CASH FLOW CONTROL! 💸📊 Think Accounts Payable is just about paying bills? Think again. An efficient AP cycle is the lifeblood of strong vendor relationships, healthy cash flow, and bulletproof financial reporting. Let’s break it down 👇 🧾 WHAT IS THE ACCOUNTS PAYABLE CYCLE? The Accounts Payable (AP) Cycle is the step-by-step process a company follows to purchase goods/services on credit and then pay its suppliers. It’s not just transactional — it’s strategic. ✅ 🔁 The 7 Key Stages of the AP Cycle 1️⃣ PURCHASE REQUISITION (PR) 🔹 Internal request raised for goods/services 🔹 Reviewed & approved by authorized personnel 2️⃣ PURCHASE ORDER (PO) 🔹 Official order sent to the supplier 🔹 Contains agreed price, quantity & terms 🔹 Serves as a binding document 3️⃣ GOODS/SERVICES RECEIPT (GRN) 🔹 Physical receipt of items or confirmation of service 🔹 Matched with PO to ensure correctness 4️⃣ INVOICE RECEIPT 🔹 Supplier sends invoice 🔹 Invoice details must match PO & GRN 🔹 Any mismatch? ➝ Query raised ✅ 5️⃣ 3-WAY MATCH 📄 PO ✔ 📦 GRN ✔ 🧾 Invoice ✔ 🔁 All 3 documents must align before approval 6️⃣ INVOICE APPROVAL & POSTING 🔹 Approved by relevant manager 🔹 Recorded in the accounting system 🔹 Scheduled for payment 7️⃣ PAYMENT PROCESSING 💰 Payment released as per agreed terms (e.g., 30 days) 📌 Methods: Bank transfer, cheque, or digital wallets 🧾 Remittance advice shared with vendor 💡 WHY IS THE AP CYCLE SO IMPORTANT? ✅ Controls outgoing cash flow ✅ Strengthens vendor trust ✅ Avoids duplicate or late payments ✅ Ensures compliance with internal controls ✅ Supports audit readiness & financial accuracy 🧠 PRO TIPS TO OPTIMIZE YOUR AP PROCESS: 🚀 Automate with AP software / ERP 🧠 Implement early payment discounts 🔐 Segregate duties for better internal control 📊 Regular AP ageing analysis 📌 Consistent vendor reconciliation 💬 In short: Accounts Payable isn’t just about paying invoices 👉 It’s about building a resilient, trustworthy, and efficient finance operation. hashtag #AccountsPayable hashtag #APCycle hashtag #FinanceOperations hashtag #ERP hashtag #AccountsPayableProcess hashtag #InternalControls hashtag #CashFlowManagement hashtag #FinancialReporting hashtag #LinkedInLearning hashtag #AccountingProfessionals hashtag #AuditReady hashtag #CorporateFinance hashtag #ProcessImprovement hashtag #BusinessFinance hashtag #AutomationInFinance

Master Accounts Payable with ease! Sharpen your finance skills with these quick AP interview Q&A insights—covering everything from invoice processing to month-end close. Ideal for professionals who want to strengthen their expertise and stay ahead in accounts payable. #AP #ACCOUNTS #PAYABLE #GST #GRN #MONTHEND #PAYMENT #VENDOR #PO #INVOICE #PROCESSING #INTERVIEW #REPORT #RECONCILIATION

💡 Why Reporting is the Unsung Hero of Accounts Payable When we talk about Accounts Payable, the focus often goes to invoice processing, vendor management, or payment terms. But there’s one element that silently drives efficiency and decision-making — Reporting. Here’s why reporting plays a major role in AP: 📊 Visibility into Cash Flow Detailed AP reports help finance teams see upcoming liabilities, forecast cash needs, and plan payments strategically. 🤝 Better Vendor Relationships Reports on pending invoices, turnaround time, and dispute trends give insights to maintain trust and avoid escalations. ⚡ Process Improvements Error analysis, aging reports, and exception tracking highlight bottlenecks that need fixing — making the AP cycle faster and more accurate. ✅ Compliance & Audit Readiness Clear, structured reporting ensures every payment is backed with the right approvals, supporting governance and audit requirements. At the end of the day, what gets measured gets managed. Reporting is not just about numbers — it’s about giving AP teams the power to make informed decisions, avoid risks, and support business growth. 👉 How do you use reporting in your AP process? #AccountsPayable #Finance #Reporting #BusinessGrowth

I’ve been working in Accounts Payable (AP) for a while, and I realized not many people really know what we do behind the scenes. So here’s a quick introduction. In simple terms, Accounts Payable is the team that makes sure every supplier and vendor gets paid correctly and on time. We handle everything from verifying invoices, matching them with purchase orders, checking approvals, and processing payments, all while keeping records accurate for reporting. But AP is not just about payments. It’s about: ✅ Building trust with vendors ✅ Maintaining strong internal control ✅ Keeping cash flow healthy for the company ✅ Supporting every department that depends on smooth operations It may not be the most glamorous role, but it requires focus, integrity, and teamwork. At the end of the day, we’re the bridge between operations and finance, and I’m proud to be part of it. #AccountsPayable #Finance #Accounting #CareerGrowth #WorkLife #ProfessionalJourney