Do I Send an Invoice to Accounts Payable or Receivable?

An invoice is a commercial document detailing goods or services provided by a seller to a buyer, specifying price and terms of sale. It serves as a record of a transaction and requests payment for delivered products or services. Confusion sometimes arises regarding the correct department within a company to which an invoice should be directed, particularly when establishing a new client or vendor relationship. Correctly addressing an invoice ensures timely processing and payment.

The Role of Accounts Payable

Accounts Payable (AP) is the department within an organization responsible for managing the money it owes to its vendors and suppliers. This department processes incoming invoices for goods or services received on credit. AP’s function is to ensure these bills are valid, accurately recorded, and paid on time. When sending an invoice, the recipient company’s AP department is the correct destination.

The AP team verifies that the goods or services listed on the invoice were received and that prices align with agreed-upon terms, often referencing purchase orders. This process helps maintain accurate financial records and supports healthy relationships with suppliers.

The Role of Accounts Receivable

Accounts Receivable (AR) represents the money owed to a company by its customers for goods or services delivered. This department is responsible for generating, sending, and collecting payments on invoices issued by their company. AR manages incoming cash flow from sales made on credit, ensuring these amounts are collected promptly.

The key distinction is that Accounts Receivable deals with money coming into the company, while Accounts Payable handles money going out. Therefore, as a vendor, you would not send your invoice to a client’s Accounts Receivable department. Their AR team focuses on collecting payments from their customers, not on paying your company.

Determining Where to Send Your Invoice

When sending an invoice, the decision of where to direct it hinges on the nature of your transaction with the recipient company. If your business has provided goods or services to another company, your invoice should always be sent to their Accounts Payable department. Their AP team is specifically set up to handle payments to external vendors like you.

To ensure your invoice reaches the correct department efficiently, check any onboarding documents or initial communications from your client. These often include specific instructions for submitting invoices, such as a dedicated email address or an online vendor portal. Many companies provide “billing,” “accounts payable,” or “vendor payments” contact information for this purpose.

If clear instructions are not immediately available, reach out to your primary contact person at the client company. They can provide the correct email address or postal address for their Accounts Payable department. Attaching your invoice as a PDF to an email is a common and efficient method for submission. A clear subject line and brief, professional message can help ensure the invoice is promptly acknowledged and processed.