Following one invoice from arrival to payment is the clearest way to understand accounts payable, because every problem the function has is a problem an individual invoice ran into. It arrives, somewhere. It is recorded, or sits. It is coded, correctly or not. It is matched, or becomes an exception. It is approved, or waits for somebody on leave. It is paid, on time or late. Six states, and a specific failure available at each. This page follows one through all six, names what goes wrong at each, and says which of the six is worth fixing first in a small team.
Arrival and recording: where invoices are lost
An invoice that arrives in a personal mailbox and is not recorded does not exist as far as the business is concerned until somebody chases. The single arrival address exists for this state alone and it is the cheapest fix in the whole process.
Coding and matching: where rework is created
Coded from a supplier name rather than the document, and it goes back. Matched against nothing because there is no order, and it becomes an exception. Both are created here and both are paid for later.
Approval and payment: where the deadline is decided
Approval is the state invoices sit in longest and the one that determines whether the close runs to time. Payment is where a second person should look, which is why paying in a reviewed batch beats paying individually as invoices clear.
Questions people ask about invoice accounts payable
Which state should we fix first?
Arrival, then approval. The first stops invoices being lost and the second stops them waiting, and between them they account for most of the delay in a small team.
How long should an invoice take end to end?
Short enough that the cut-off is never the constraint. The useful measure is not an average but the size of the unapproved pile as the month ends.
What if an invoice is wrong?
It becomes an exception with an owner, not an invoice that waits. The distinction is whether somebody is accountable for resolving it.