9 min read
The accounts payable process, step by step
Most descriptions of the AP process are a tidy diagram nobody's week resembles. This is the version with the awkward parts left in: what each step is for, what it costs when it slips, and a clear line between the steps worth automating and the ones that must stay human.
The shape of it
Seven steps, and the failure at each one is specific enough to design against. Notice that the failures cluster: four of them are transcription and lookup problems, and two are judgement problems. That split is the whole decision about what to automate.
What each step costs when it slips
The cost of a broken AP step is rarely the step itself. It is the work created downstream, usually weeks later, by someone who did not cause it.
| Step | What it is for | What it costs when it slips |
|---|---|---|
| 1. Arrives | Getting every invoice to one place | An invoice sits unread in a personal mailbox and surfaces as an overdue notice |
| 2. Captured | Vendor, number, dates, terms, lines, tax, total | Three to five minutes per bill of transcription — and a confident wrong value is harder to catch than a blank one |
| 3. Vendor matched | Attaching the bill to the right vendor record | Acme, Acme Inc and ACME Supply as three records; reporting splits and somebody spends a day merging them |
| 4. Coded | Deciding which accounts and items the spend belongs to | Inconsistent coding produces variances that are not real, and time spent investigating them |
| 5. Approved | Someone with authority confirming the spend | Skipped under time pressure — the control you most need when busy is the one you drop when busy |
| 6. Posted | Recording it against the right vendor and dates | No document attached, so every future question becomes an email search |
| 7. Paid | Deciding what to pay and when | Paid early because it was entered, late because it was not, or twice |
One invoice, end to end
It helps to follow a single bill rather than talk about volume. Here is a three-line invoice from a clothing supplier, handled by hand, timed honestly — the typing is the smallest part.
- Open the email, find the attachment
- 0:20
- Download, open the PDF
- 0:25
- Find the vendor in QuickBooks
- longer if the name differs
- 0:35
- Create the bill, enter header fields
- number, dates, terms
- 0:50
- Enter three line items
- 1:30
- Choose accounts and items
- the judgement part
- 0:40
- Attach the document, save
- 0:30
Illustrative, not measured across a population — but worth timing yourself on five of your own. Most people are surprised how little of it is typing and how much is looking things up.
What to automate, and what to leave alone
| Step | Automate? | Why |
|---|---|---|
| Arrives | Yes | One destination beats any amount of discipline about forwarding |
| Captured | Yes | High volume, rule-shaped, nobody's judgement improves it |
| Vendor matched | Yes | A lookup against a list you already have |
| Coded | Mostly | Consistency is the win; genuinely ambiguous cases should be flagged, not guessed |
| Approved | No — route it | The decision is the control. Software can prepare, route and record it |
| Posted | Yes | Mechanical, and it is where the document should get attached |
| Paid | No | A cash-flow decision with a different risk profile. A separate project |
The two most common mistakes are at opposite ends. Automating approval removes the only control that matters. Refusing to automate capture keeps a skilled person doing transcription, which is both expensive and the least accurate way to do it.
Controls checklist
Work through these against your own process. Any you cannot tick is a specific thing to fix, in rough order of what it costs to leave broken.
Last updated 2026-10-21.