Accounts Payable

Finance Invoice-to-Pay Financial Accounting Component Process

Accounts payable is the back half of procure-to-pay: turning a supplier's invoice into an approved, matched, paid and recorded liability without paying twice, paying early, or paying someone who is not the supplier.

Workflow

01Invoice Receipt
023-Way Match
03Payment Approval
04Payment Disbursement

Data in and out

IN Supplier invoices from Supplier e-invoicing, email and portals · continuousWithout it: Invoices arrive by exception and are keyed by hand.
IN Purchase orders and goods receipts from Procurement · continuousWithout it: Three-way matching has nothing to match against.
OUT Payment file to ABA · per payment runWithout it: Suppliers are not paid.
OUT Remittance advice to Suppliers · per payment runWithout it: Suppliers cannot reconcile and call the finance team instead.
IN Goods and service receipts from Procurement · continuous
IN Supplier master from Procurement · on change

If you change this

It implies 7 topics across 2 modules, including Supply Chain Management which you might not expect.

See the path ahead →

Where AP sits in procure-to-pay

AP inherits whatever procurement hands it. Most AP pain is actually upstream: no purchase order, a receipt nobody entered, or a supplier master record with the wrong bank details.

01
Supplier onboarding
The vendor master is created and verified, including bank details and tax registration.
02
Purchase order raised
Commitment is recorded against budget before the spend happens.
03
Goods or services received
Receipting confirms what actually arrived, and when.
04
Invoice received
Supplier invoice arrives by email, portal, EDI or e-invoicing network.
05
Matching
Invoice is matched against the PO and the receipt within tolerance.
06
Approval
Exceptions and non-PO invoices route to the delegated approver.
07
Payment
Approved invoices are selected into a payment run and disbursed.
08
Reconciliation and reporting
Payments clear the bank, the subledger agrees to the ledger, and the aged payables report is credible.

Controls that matter

Vendor master control: Creating and amending supplier bank details is the highest-risk transaction in AP. It needs dual authorisation and callback verification.
Segregation of duties: The person who can create a supplier must not be able to approve an invoice or release a payment.
Duplicate detection: Matching on supplier, invoice number, amount and date before posting, not after paying.
Delegation of authority: Approval limits configured in the system, mirroring the signed DoA rather than an informal understanding.
Payment run review: Someone independent reviews the proposed payment file before release.

Invoice fraud almost never defeats the matching engine. It changes the bank account on a legitimate supplier and lets the matching engine pay it correctly. Design the vendor master controls accordingly.

Non-PO invoices

Every AP implementation discovers a long tail of spend with no purchase order — utilities, rates, legal fees, subscriptions. Pretending it away is why go-live hurts.

Categorise it: Identify which spend types are legitimately non-PO rather than treating each one as an exception.
Route on coding: Without a PO there is no commitment, so approval must happen on the account and cost centre coding.
Use recurring templates: Predictable charges like rent and utilities should post from templates, not be keyed monthly.
Measure it: Non-PO share is a procurement compliance metric, and it belongs on a report someone reads.