A complete list of accounts payable examples by industry

Accounts payable (AP) is more than just tracking bills—it’s a critical function that keeps business operations running smoothly. Every invoice, from supplier payments to logistics costs, represents a financial obligation that needs to be managed strategically. Poor AP management can disrupt cash flow, strain supplier relationships, and create inefficiencies that slow down growth.

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In this guide, we’ll break down key accounts payable examples, explain their role in financial management, and share best practices to ensure your AP processes support business stability and efficiency.

What is accounts payable?

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Accounts payable appear as a liability on the balance sheet and directly impacts cash flow—delayed payments can strain relationships, while mismanagement can lead to unnecessary penalties or missed discounts.

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For example, a retailer purchasing inventory on credit records the transaction under accounts payable until the invoice is settled. Similarly, a company paying for monthly utility services will account for these recurring costs under AP. Proper AP management ensures that these financial obligations are met on time without disrupting operations or overextending cash reserves.

A detailed breakdown of common accounts payable examples

Every business, regardless of industry, relies on accounts payable to manage operational costs. Below are some of the most common AP transactions and why they matter.

1. Procurement of raw materials

Raw materials are essential for manufacturing businesses, forming the foundation of production. When a company orders steel, wood, or chemicals from a supplier, the cost is recorded as accounts payable until the invoice is settled.

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For instance, an automotive manufacturer sourcing metal sheets for car production must ensure timely supplier payments to avoid production delays. Missing a payment deadline could lead to supply shortages, increased costs, or strained vendor relationships.

2. Equipment

Businesses frequently acquire machinery, office technology, and production equipment through accounts payable. These purchases often involve large sums, so companies may negotiate extended payment terms to manage cash flow efficiently.

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For example, a manufacturing company investing in new assembly-line machinery may receive equipment upfront but defer payment based on vendor terms, categorizing it under accounts payable. Timely payments prevent interest charges or disruptions in future equipment supply.

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In industries where technology upgrades are frequent, such as healthcare or IT, structured AP management ensures businesses can maintain operational efficiency while controlling costs.

3. Outsourced manufacturing and assembly services

Many businesses rely on external contractors and suppliers for assembling parts or completing specialized tasks. These subcontracted services are recorded under accounts payable until the invoice is cleared.

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For example, in the construction industry, general contractors often subcontract electrical, plumbing, and HVAC work to specialized firms. The main contractor receives invoices from these subcontractors and logs them as accounts payable.

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Timely payments ensure that projects stay on schedule, subcontractors remain engaged, and business relationships are maintained. Delays in payments can disrupt workflow and lead to higher costs if subcontractors pause work or impose late fees.

4. Vendor payments

Vendor payments make up a significant portion of accounts payable, covering everything from raw materials to professional services. Maintaining strong vendor relationships through timely payments is crucial for securing favorable terms, avoiding late fees, and ensuring reliable supply chains.

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For example, a retail business relies on suppliers to deliver inventory on time. Late payments can lead to delayed shipments, restocking issues, or even losing priority with key vendors. Many businesses use automated AP systems to streamline vendor payments, improving accuracy and preventing bottlenecks that disrupt operations.

5. Business licensing fees

Many businesses pay licensing fees to operate legally, use proprietary technology, or comply with industry regulations. These costs fall under accounts payable until the invoice is settled.

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For example, software companies pay annual licensing fees to use third-party development tools, while restaurants require health permits and liquor licenses. Keeping up with these payments ensures compliance and uninterrupted business operations.

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Missing a licensing payment can result in penalties, service disruptions, or even legal consequences, making timely AP management essential.

6. Rental agreements and lease obligations

Leasing provides businesses with access to high-cost assets—such as office space, vehicles, or specialized machinery—without the burden of upfront capital investment. These lease payments are recorded under accounts payable as ongoing obligations.

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For example, a logistics company leasing a fleet of delivery trucks logs monthly lease payments as AP liabilities. While leasing helps businesses preserve working capital, missing payments can result in late fees or contract violations, impacting operations. Many businesses automate lease payments to avoid penalties and improve financial forecasting.

7. Business travel and employee reimbursements

Travel costs, including airfare, lodging, meals, and transportation, are common accounts payable entries, particularly for businesses with sales teams, consultants, or executives traveling for work. These expenses are typically billed to corporate accounts or reimbursed through employee expense reports.

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Companies use expense management software to track and categorize travel-related spending. For example, a consulting firm sending employees to client sites will log hotel bookings, airfare, and per diem costs as accounts payable.

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Automating approval workflows for these expenses helps businesses prevent overspending, reduce errors, and ensure compliance with company policies.

8. Shipping, freight, and supply chain costs

Shipping, freight, and logistics expenses fall under accounts payable as businesses coordinate the movement of goods. These costs include third-party freight services, carrier fees, and warehousing expenses.

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Retailers, for example, rely on freight companies to transport inventory from warehouses to stores. A missed payment to a logistics provider could delay shipments, leading to stock shortages and lost revenue.

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Similarly, manufacturers must account for the cost of moving raw materials and finished products between suppliers and customers.

Industry-specific accounts payable examples

Accounts payable functions differently across industries, shaped by unique expenses, regulatory requirements, and supplier relationships. Understanding industry-specific AP challenges helps businesses optimize cash flow and avoid common pitfalls.

Healthcare

Hospitals, clinics, and medical facilities rely on accounts payable to manage essential expenses like:

• Medical supplies: Consumables like syringes, gloves, and pharmaceuticals are ordered in bulk and paid for through AP.
• Equipment leasing: High-cost items like MRI machines and ventilators are often leased rather than purchased outright.
• Insurance and compliance fees: Healthcare providers must pay malpractice insurance, regulatory compliance fees, and software subscriptions for electronic health records (EHR).

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Managing AP in healthcare requires strict compliance with payment deadlines to avoid supply shortages, delayed patient care, or regulatory fines. Automating invoice approvals and integrating AP with inventory management helps ensure seamless operations.

Technology

In the tech sector, accounts payable is dominated by licensing fees, hardware purchases, and cloud-based services. Key AP categories include:

• Software licensing: Companies pay for enterprise software, developer tools, and cloud-based platforms like AWS or Salesforce.
• Hardware procurement: IT firms regularly purchase laptops, servers, and networking equipment, often on net terms.
• Outsourced development: Many tech companies work with third-party engineers or offshore development teams, making AP crucial for managing international vendor payments.

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Tech companies often deal with complex vendor agreements, variable licensing costs, and recurring subscription fees. AP automation tools help track renewals, prevent service disruptions, and maintain financial visibility across multiple expense categories.

Retail

Accounts payable in the retail industry primarily revolves around inventory purchases, logistics, and supplier payments. Managing AP effectively is crucial for maintaining a steady flow of goods and avoiding supply chain disruptions.

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Key accounts payable categories in retail include:

• Inventory purchases: Retailers must pay suppliers for goods before or shortly after they hit store shelves. Delayed payments can result in stock shortages or strained vendor relationships.
• Logistics and distribution: Warehousing, shipping, and fulfillment costs are essential AP items, especially for e-commerce businesses. Timely payments ensure smooth operations and prevent shipping delays.
• Store operations and maintenance: Rent, utilities, and equipment purchases also fall under AP.

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Retailers often optimize their AP processes by negotiating favorable payment terms with suppliers, using just-in-time inventory strategies, and leveraging automation to streamline invoice approvals and payments.

Recording and managing accounts payable

Accurate accounts payable management starts with proper bookkeeping. Businesses use double-entry accounting, where every AP transaction impacts both liabilities and assets.

How to record accounts payable

When a company receives an invoice from a supplier, the transaction is recorded as:

• A debit to an expense or inventory account, reflecting the purchase
• A credit to accounts payable, recognizing the outstanding liability

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Once the bill is paid, the AP account is debited (reduced), and cash or bank accounts are credited accordingly.

Best practices for managing accounts payable

• Maintain clear payment terms: Ensure all vendor agreements specify due dates, payment methods, and potential penalties for late payments.
• Regularly reconcile AP balances: Cross-check invoices, payments, and supplier statements to catch discrepancies early.
• Use an aging report: Categorizing outstanding invoices by due date helps prioritize payments and avoid late fees.
• Automate AP workflows: Digital tools can speed up invoice approvals, prevent errors, and provide real-time visibility into outstanding payables.

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For example, a manufacturing company may use AP automation to match purchase orders with incoming bills, reducing manual effort and preventing overpayments. In contrast, a consulting firm might implement expense tracking software to manage vendor contracts and recurring payments efficiently.

What are the benefits of automating accounts payable processes?

Manual AP management is time-consuming and prone to errors. Automating AP processes enhances efficiency, accuracy, and financial oversight.

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Key benefits of AP automation include:

• Faster invoice processing: Optical character recognition (OCR) and AI-powered tools extract data automatically, eliminating manual entry.
• Error and fraud reduction: Automated matching of invoices with purchase orders helps detect duplicate or fraudulent payments.
• Better cash flow visibility: AP automation provides real-time insights into outstanding liabilities, helping businesses plan payments effectively.

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For example, a logistics company using AP automation might cut invoice processing times in half by eliminating paper-based approvals, while a SaaS business may streamline vendor payments using scheduled, automated disbursements.

How to effectively manage accounts payable with Ramp

Across industries, AP examples—ranging from inventory purchases in retail to equipment leasing in healthcare—highlight the importance of structured payment management. That’s why businesses are fast to consider AP automation as it minimizes errors, accelerates approvals, and provides better visibility into financial obligations.

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With Ramp Bill Pay, businesses can automate time-consuming AP tasks, giving your team the tools to work faster, reduce errors, and capture savings effortlessly. With our accounts payable software, you can:

• Automate invoice processing: AI-driven OCR captures and codes invoices and line items with precision, reducing manual work and minimizing errors.
• Simplify approval workflows: Set up smart approval processes with layered routing rules, ensuring reviews are automated and alerts are triggered only for key changes.
• Centralize payment management: Handle all vendor payments—domestic or international—through a single platform, whether by check, card, ACH, or wire, with full transparency.
• Streamline repetitive workflows: Automate recurring bills, batch payments, and vendor onboarding while using bulk editing to update records quickly.

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AP management should be seamless, not time-consuming. Get started with Ramp Bill Pay for effective AP management, or try our free, interactive demo.