Listing the accounts payable process steps is straightforward and slightly beside the point. Receive, code, match, approve, post, pay: six steps, universally agreed, and knowing them tells you almost nothing about why your month end is late. What matters is which of the six binds. In nearly every small finance team it is the same two, and they are the two that involve waiting for somebody else. This page lists the steps for completeness, then spends its time on the binding constraint, because a process improvement aimed anywhere else produces a faster version of the same delay.
The six steps, briefly
Receive the invoice against a supplier with a date. Code it to an account and a cost centre. Match it to the order and, where one exists, the receipt. Approve the spend. Post it to the ledger. Pay it in a batch. Four of those are under your own control and take minutes.
The two that bind: matching exceptions and approval
Both involve somebody outside payables. A matching exception waits on a budget holder or a receiver to explain a difference; approval waits on a person who is not thinking about your cut-off. Everything else can be made faster and the month will still be late if these two are not addressed.
What that means for where to spend effort
Reducing touches on the smooth invoices saves real hours, and On the worked example on this site, 400 invoices at three touches of six minutes with a 12% exception rate is 134.4 hours a month, $4,300.80 at a $32 loaded rate and $10.75 an invoice. But the deadline is set by the invoices that wait, so the first improvement worth making is usually publishing what is unapproved rather than speeding up the coding.
Questions people ask about accounts payable process steps
How many steps should we have?
Six is the normal shape and the count is not the interesting number. Count touches, which are the times a person handles an invoice, and include the chases: teams routinely believe they have two and discover four.
Can steps be combined?
Coding and matching often can, and should be, since they use the same information. Entry and approval must not be, because that is the separation the whole control rests on.
Where does payment sit?
Last, in a batch, with a review before release. Paying invoices individually as they clear feels responsive and removes the one point where a second person routinely looks at what is leaving.