AP Glossary
Essential accounts payable terms and definitions for finance professionals. From 3-way matching to zero-based budgeting.
Accounts Payable (AP)
Money a company owes to suppliers for goods and services received but not yet paid for.
Learn moreAP Automation
Technology that automates accounts payable processes including invoice capture, matching, approval, and payment.
Learn moreApproval Workflow
The defined process for routing invoices to appropriate approvers before payment.
Learn moreAudit Trail
A chronological record of all actions taken on an invoice from receipt through payment.
Learn moreAIA Billing
A standardized billing format using AIA G702/G703 forms common in construction for progress payments.
Learn moreAnomaly Detection
Using statistical or AI methods to identify unusual patterns in AP data that may indicate errors or fraud.
Learn moreAging Report
A report showing outstanding invoices categorized by how long they have been unpaid.
Learn moreAccrual Accounting
An accounting method that records revenue and expenses when earned or incurred, not when cash is exchanged.
Learn moreAI Agent
An autonomous AI system that can observe, decide, and take actions to complete AP tasks without continuous human guidance.
Learn moreChange Order
A formal modification to a construction contract that changes the scope, cost, or timeline of work.
Learn moreCommitted Cost
The total financial obligation on a construction project including contracts, purchase orders, and change orders.
Learn moreCost Code
A standardized numbering system used to categorize and track construction costs by type of work.
Learn moreChurch Bookkeeping
The practice of recording and managing financial transactions for churches, including tithes, offerings, designated funds, and ministry expenses.
Learn moreDays Payable Outstanding (DPO)
A financial ratio measuring the average number of days a company takes to pay its suppliers.
Learn moreDuplicate Payment
Paying the same invoice more than once, resulting in overpayment to a vendor.
Learn moreDynamic Discounting
A program where buyers offer to pay invoices early in exchange for a sliding-scale discount from the supplier.
Learn moreDonor-Restricted Net Assets
Net assets subject to donor-imposed restrictions on how or when they can be spent.
Learn moreERP Integration
Connecting AP automation software with your Enterprise Resource Planning system for seamless data flow.
Learn moreException Handling
The process of resolving invoices that fail automated validation or matching.
Learn moreEarly Payment Discount
A discount offered by suppliers for paying invoices before the standard due date.
Learn moreException Management
The systematic process of identifying, categorizing, and resolving invoices that fail automated processing.
Learn moreException Resolution
The process of investigating and resolving invoices that fail automated matching or validation.
Learn moreFund Accounting
An accounting system that segregates resources into funds based on their source and intended purpose.
Learn moreForm 990
The annual information return that tax-exempt organizations file with the IRS.
Learn moreFASB ASC 958
The accounting standard governing financial reporting for not-for-profit entities.
Learn moreFunctional Expenses
Nonprofit expenses categorized by organizational function: program services, management, and fundraising.
Learn moreGoods Receipt (GR)
Documentation confirming that ordered goods have been physically received.
Learn moreGrant Management
The process of tracking, reporting, and ensuring compliance for grant-funded expenditures.
Learn moreGeneral Ledger (GL)
The master accounting record that contains all financial transactions organized by account.
Learn moreInvoice Processing
The workflow of receiving, verifying, approving, and paying vendor invoices.
Learn moreInvoice Matching
The process of comparing an invoice against supporting documents to verify accuracy before payment.
Learn moreInvoice Approval Workflow
The structured routing of invoices to designated approvers based on rules before payment is authorized.
Learn moreInvoice Capture
The process of receiving and digitizing vendor invoice data for entry into the AP system.
Learn moreIntelligent Automation
The combination of AI, machine learning, and automation to handle complex AP processes end-to-end.
Learn morePurchase Order (PO)
A commercial document issued by a buyer to a seller indicating the types, quantities, and agreed prices for products or services.
Learn morePayment Terms
The conditions under which a seller expects payment from a buyer, including due date and any discounts.
Learn morePayment Run
A scheduled batch process where approved invoices are grouped and payments are issued to vendors.
Learn moreProgress Billing
Invoicing based on the percentage of work completed rather than upon final delivery.
Learn morePay-When-Paid
A contract clause where the general contractor pays subcontractors only after receiving payment from the owner.
Learn moreProgram Services Expense
Costs directly related to fulfilling a nonprofit organization's mission and delivering its programs.
Learn morePredictive Analytics
Using historical AP data and AI to forecast future outcomes like cash needs, exceptions, and vendor behavior.
Learn morePurchase Order Reconciliation
The process of comparing purchase orders against invoices and receipts to verify accuracy before payment.
Learn moreRetention / Retainage
A percentage of payment withheld from each progress payment until project completion to ensure satisfactory work.
Learn moreRestricted Funds
Donations or grants that must be used for a specific purpose as defined by the donor or grantor.
Learn moreReconciliation
The process of comparing two sets of financial records to ensure they are consistent and accurate.
Learn moreRobotic Process Automation (RPA)
Software robots that automate repetitive, rule-based AP tasks by mimicking human interactions with systems.
Learn moreSOX Compliance
Adhering to the Sarbanes-Oxley Act requirements for financial controls and documentation.
Learn moreStraight-Through Processing (STP)
Invoices that are processed from receipt to payment-ready without any manual intervention.
Learn moreSegregation of Duties (SoD)
An internal control that distributes critical financial tasks among multiple people to prevent fraud and errors.
Learn moreSingle Audit
A federally required audit for organizations that spend $750,000 or more in federal awards in a fiscal year.
Learn moreBrowse by Category
Core
18 termsProcesses
5 termsMetrics
1 termsCompliance
11 termsTechnology
3 termsConstruction
10 termsNonprofit
11 termsAI & Automation
7 termsHave questions about AP automation?
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