Film Accounting Glossary
Accounts payable
What is accounts payable?
Also called AP.
Accounts payable (AP) is the money a production owes to vendors, crew, and service providers that has been invoiced but not yet paid.
The AP clerk matches each invoice to a purchase order and a packing slip or approval before it enters the check run. Outstanding AP is a live liability, so a cost report that ignores unpaid invoices will understate the true cost of the picture.
Example
A vendor invoices $18,400 on net-30 terms for a three-week vehicle rental. It sits in AP from the day it is coded until the check clears. A cost report that ignores unpaid invoices reports $18,400 less spend than the show has actually committed.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
The accounts payable clerk's queue and the weekly check run, feeding the commitments and actuals columns of the cost report.
Common mistake
Building a cost report from payments made rather than invoices received. Unpaid AP is a real liability, and ignoring it understates the picture by however much is sitting in the queue.
Related questions
- Is accounts payable the same as a commitment?
- No. A commitment is an approved purchase order with no invoice yet. AP is an invoice received and not yet paid. Both belong on the cost report, in different columns.
- How quickly do productions pay vendors?
- Net 30 is common, and slower is not unusual. That gap is why vendors run credit checks and why working capital, not profitability, is what sinks equipment suppliers.