When considering a career path, most people want to know: what could I potentially earn? This question is especially common for those exploring accounts payable manager roles.
In this post, we will dive into key details on accounts payable manager salaries, including the current national average and how pay varies by location, experience level, company size, and more.
You'll see a breakdown of average accounts payable manager earnings compared to related roles like accountants and controllers. We'll also discuss future outlooks for salary growth, along with other monetary benefits beyond base pay that contribute to total compensation.
Introduction
The role of an accounts payable (AP) manager is critical for companies to efficiently manage cash flow and vendor relationships. AP managers oversee the entire process of paying a company's bills and invoices to external suppliers. This requires expertise in accounting, financial analysis, negotiation, and organizational skills.
With such an important business function, what kind of salaries do AP managers earn? This article will provide an overview of average AP manager compensation levels and discuss the key factors that impact pay, including:
Defining the Accounts Payable Manager Role
Accounts payable managers have a range of essential responsibilities, including:
- Overseeing the accounts payable process from invoice receipt to payment
- Ensuring vendor invoices are accurate and monitoring for duplicate payments
- Negotiating pricing and payment terms with vendors
- Analyzing AP data to identify opportunities for cost savings
- Managing accounting staff responsible for processing invoices
To be successful as an AP manager, certain qualifications are required:
- Bachelor's degree in accounting, finance or related field
- 5+ years experience in an accounts payable role
- Excellent analytical, communication, and leadership abilities
Key Factors Influencing AP Manager Salaries
An AP manager's compensation depends on several key variables:
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Education Level: Managers with a bachelor's degree earn approximately 10-15% higher pay compared to those without a college degree. Advanced certifications can also boost salaries.
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Years of Experience: The more years spent managing the AP function, the higher the compensation. Experienced AP managers can earn well into six figures.
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Company Size and Industry: AP managers at large corporations earn higher salaries compared to those at small or mid-sized businesses. High-paying industries include banking, tech, and engineering.
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Geographic Location: Regional economic factors lead to pay differences. Major metropolitan areas tend to offer higher salaries.
Understanding these salary influencers provides helpful context when evaluating job offers as an accounts payable manager.
Average Accounts Payable Manager Salary
Accounts payable (AP) managers play a critical role in company finances, overseeing the payment of invoices and bills. As such, their compensation reflects the importance and complexity of this position. Here is a detailed overview of average accounts payable manager salaries.
National Average Salary
According to the Bureau of Labor Statistics (BLS), the median annual salary for financial managers, including accounts payable managers, is $134,180 as of 2021. The top 10% earn more than $208,000 per year.
Location also impacts AP manager pay. For example, those working in New York and California tend to earn among the highest AP manager salaries due to the high cost of living and abundance of large corporations.
Average Salary by Experience
Experience significantly influences accounts payable manager pay. Here is a breakdown:
- Entry-level (0-5 years): $58,000
- Mid-career (5-10 years): $77,000
- Experienced (10-20 years): $103,000
- Late career (20+ years): $130,000
As seen, salaries can nearly double from entry-level to late career, as AP managers gain specialized expertise and prove their strategic value.
Average Salary by Company Size
Larger companies tend to pay higher AP manager wages based on their bigger budgets and operations complexity.
- Small business (under 100 employees): $67,000
- Mid-size company (100-1000 employees): $88,000
- Large corporation (over 1000 employees): $122,000
In large enterprises, accounts payable departments and managers handle high volumes of financial transactions, justifying the higher compensation.
In summary, accounts payable manager salaries range widely based on location, years of experience, and company size. The highest paid AP managers work for major corporations in expensive metro regions with 20+ years in the field.
Regional Differences in AP Manager Pay
Examines how geographic location within the U.S. impacts accounts payable manager salaries based on cost of living, labor supply/demand, and other local attributes.
Highest-Paying Metropolitan Regions
The New York City and San Francisco Bay Area metro regions have the highest average salaries for accounts payable managers in the U.S., generally ranging from $90,000 to $120,000 per year. The high cost of living and demand for talent in the dense financial and technology hubs drive up wages. Other major metros with top-tier AP manager pay include:
- Washington, D.C. ($85,000 - $110,000)
- Boston ($80,000 - $105,000)
- Los Angeles ($75,000 - $100,000)
- Seattle ($70,000 - $95,000)
Within these regions, accounts payable manager salaries tend to be the highest in the urban city centers and taper off slightly in the surrounding suburbs. Experience level, company size/industry, and specific job responsibilities also impact exact compensation offers.
Lowest-Paying Metropolitan Regions
Many mid-sized metros in the Midwest and South have the lowest average accounts payable manager salaries, in the range of $45,000 - $65,000 annually. More affordable cost of living and lower demand contribute to reduced pay rates. Some examples of lower-paying major metro areas include:
- St. Louis ($48,000 - $68,000)
- Pittsburgh ($50,000 - $70,000)
- Atlanta ($52,000 - $72,000)
- Denver ($55,000 - $75,000)
Within these metros, accounts payable manager salaries tend to be consistent across urban and suburban areas. Smaller companies also generally pay AP managers on the lower end of the scale based on tighter budgets and operations.
Comparing Salaries by State
When analyzing average accounts payable manager pay by state, those with major business hubs and talent centers again lead the way. For example:
- New York - $76,000
- California - $73,000
- Massachusetts - $71,000
- Washington - $69,000
By contrast, AP manager salaries in more rural and less populated states trend lower:
- Idaho - $52,000
- Iowa - $54,000
- Arkansas - $55,000
- Mississippi - $56,000
The gap between the highest and lowest-paying states exceeds $20,000 for similar roles. Geographic differences in labor supply, economic strength, talent demand, and cost of living all contribute to the state-by-state variance.
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Earning Potential Comparison to Related Roles
Vs. Accountants
Accounts payable (AP) managers often have similar educational backgrounds and skills as accountants. However, their earning potential can vary significantly.
On average, accounts payable managers earn higher salaries than accountants. According to PayScale data, accounts payable managers have an average base salary of $55,615 per year, compared to $51,249 for accountants. This indicates AP managers can expect around 8% higher pay.
Some key factors driving the salary differential include:
- Greater specialization: AP managers build expertise specifically in accounts payable processes, analytics, and systems. This niche focus commands better compensation.
- People management: AP managers frequently oversee teams and have added responsibilities for mentoring, evaluating performance, and making hiring decisions. These leadership capabilities warrant increased pay.
- Budget oversight: AP managers have oversight and input on departmental budgets, which requires financial acumen that boosts pay.
- Industry/company size: Larger corporations and certain industries (e.g. finance, tech) tend to pay AP managers better than accountants.
So while accountants build foundational accounting skills applicable to AP management, the specialized capabilities and oversight duties of the manager role lead to stronger earning potential over time.
Vs. Controllers
Accounts payable managers and controllers both play important financial leadership roles for companies. However, controllers typically earn significantly higher salaries.
On average, controllers make $96,905 per year according to PayScale, compared to $55,615 for AP managers. This substantial 41% pay gap exists for several reasons:
- Broader responsibilities: Controllers oversee all accounting operations and set financial strategy, while AP managers focus specifically on accounts payable.
- Higher influence: Controllers have greater input on high-level decisions and budgets across the company.
- Advanced qualifications: Controller positions often require more advanced education like an MBA or CPA certification.
- Seniority/experience: Controllers usually have over 8 years experience compared to ~5 years for managers.
So while AP managers have vital specialized domain expertise in accounts payable, controllers have broader accounting knowledge, leadership influence, and qualifications that warrant their higher compensation levels currently.
In summary, AP managers generally earn strong salaries compared to accountants due to their specialized capabilities and oversight of key processes and teams. However, controllers still make substantially more due to their advanced seniority, credentials, experience, and company-wide financial responsibilities. Understanding these salary differentials can help AP professionals evaluate career paths and benchmark earning potential.
Other Benefits Beyond Base Salary
Accounts payable (AP) managers often receive additional compensation and benefits beyond their base salary. These extra perks help supplement their income and provide other monetary rewards for strong performance.
Performance Bonuses
Many companies offer AP managers annual bonuses based on meeting certain targets or goals. Typical metrics used to calculate bonuses include:
- Cost savings from process improvements or expense reductions
- Invoice processing times and accuracy rates
- Days sales outstanding (DSO) reductions
- Compliance with accounting controls and procedures
Bonuses usually range from 5-15% of base pay but can sometimes be as high as 25% for exceeding all goals. Bonuses incentivize managers to optimize workflows, cut costs, minimize errors, improve reporting, and boost the bottom line.
401(k) Matching
401(k) matching is another popular way employers help AP managers save for retirement. Companies often match 50-100% of contributions up to 3-6% of salary.
For example, if an AP manager earns $80,000 and contributes 5% ($4,000) to their 401(k), the company might match half by contributing an additional $2,000. This equals $6,000 in total retirement savings per year.
401(k) matching gives managers an effortless way to accumulate extra savings and investment growth for the future while working for their current employer.
Future Outlook for Accounts Payable Manager Salaries
Projected Salary Growth Nationally
According to research from staffing industry analysts, the median salary for accounts payable managers in the US is projected to increase by approximately 3-5% annually over the next 5 years. This steady growth can be attributed to a few key factors:
- General inflation and cost of living adjustments
- Increasing complexity of AP workflows and systems requiring more specialized skills
- High demand for accounting talent amid labor shortages
- Expansion of accounts payable manager responsibilities and oversight
While broader economic conditions may cause some variability year-over-year, the career outlook for those in AP manager roles remains strong overall.
Regional Variations in Growth Trends
Behind the national numbers, growth rates for accounts payable manager salaries can fluctuate more significantly between different regions of the country. For example:
- Parts of the Southwest and West are likely to see above-average salary increases for AP managers, fueled by rapid economic expansion and talent gaps.
- More modest growth is expected in parts of the Midwest, where cost of living remains relatively low.
- Major metro areas on the coasts will continue to offer the highest salaries, but lower growth rates due to mature markets.
So when evaluating salary progression opportunities down the line, geography can play a pivotal role. Those open to relocation may be able to take advantage of accelerated career growth by moving between regions with varying economic landscapes.
Conclusion and Key Takeaways
Based on the analysis, here are some of the key takeaways regarding accounts payable manager salaries and earning potential:
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The average salary for an accounts payable manager in the US is approximately $65,000 per year. This can vary based on factors like location, company size, industry, and years of experience.
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Larger companies and those in industries like finance and insurance tend to pay AP managers higher salaries. Experience also boosts earning potential.
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Accounts payable manager salaries have grown over the past decade. With increasing business complexity, the role has taken on more strategic responsibilities beyond basic invoice processing.
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Strong financial analysis, communication, leadership, and analytical thinking skills can set AP managers apart. Obtaining certifications like the CPA further boosts salary potential.
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Geographic location impacts salary ranges. Major metropolitan areas tend to pay AP managers the highest wages based on the higher cost of living.
In summary, an accounts payable manager can expect strong earning potential and career growth in this critical finance and accounting role that continues to expand in scope and value. Pay scales are competitive, with salaries often exceeding $80-90K for those with advanced expertise and certifications.
