A Quick Guide to the Accounts Payable Process

This means practically every other function interacts with, feeds into, or depends on AP teams. Optimization in such an interconnected department will naturally cascade through the rest of the organization – making business-wide operations run more efficiently and everyone’s jobs easier.

AP departments can therefore be change makers who actively drive innovation, transformation, and improvement. It’s an ability that’s increasingly important to 47% of Finance and Shared Services teams according to The Process Optimization Report 2025: Finance Edition.

So there’s a lot riding on AP processes. They can provide hiding places for all sorts of value opportunities, minimizing cash leakage from:

• Late payment – affecting 55% of all B2B invoiced sales in the US alone
• Duplicate payments – estimated to be around 1.5% of an organization's total outgoing cash flow (which can easily add up in large enterprises)
• Payment errors (such as incorrect billing addresses) – occurring in 39% of invoices, according to one estimate
• Missed early payment discount opportunities – with 80% of supplier discounts going unclaimed

To understand where these issues come from, we need to iron out exactly what the Accounts Payable process looks like. Look out for our tips along the way for making the Accounts Payable process work.

The key elements of the Accounts Payable process

1. Receiving an invoice

The Accounts Payable department gets to work the moment a supplier sends in an invoice. These documents can arrive in various formats – email, vendor portals, EDI invoicing, and yes, even paper. So the first AP challenge is simply managing these different types of incoming invoices. It’s easy for them to get lost across different apps, systems, and desktops. This then forces teams to waste time requesting the vendor reissue the invoice – not a great look, and not great for supplier relationships either.
Documents can arrive with missing or incorrect data: the invoice number, currency field, payment terms, and tax information – to name just a few examples. On top of incomplete invoices, further discrepancies can come from inconsistent formats, including the date and even the vendor name.
Invoice processing also entails a lot of data entry. If AP teams rely on manual processes, they pave the way for human error and wasted time. This applies to paper invoices as well as electronic formats when the Accounts Payable department doesn’t have efficient invoice automation processes in place.

Tip: Automate the extraction and transfer of invoice data to your finance systems. This ensures a greater level of speed, accuracy, and reliability, so you’re not setting yourself up for rework and costly errors from the start.

2. Validating an invoice

Next, it’s time to check the vendor invoice against the purchase order (PO). The matching stage can uncover errors including quantity, price, and item descriptions. It can come to light that the invoice is a duplicate, or even that it corresponds to a PO that hasn’t been approved yet.
This part of the AP process is a hotbed for rework. Three-way match failures – when the purchase order, supplier invoice, and goods receipt are shown to be inconsistent – can necessitate exceptions where AP teams have to manually intervene and correct data.

Tip: Celonis’s Payment Term Checker App automatically compares and standardizes payment terms across your open invoices for you, using vendor master data. Alongside that, you can use the Duplicate Invoice Checker App to identify and collate any potential duplicates for you to act on, minimizing lengthy audit and recovery efforts.

• Read: How to make perfect matches between purchase orders and invoices.

3. Approving a payment

Great news: you’ve checked your invoice and it matches the PO. Now, you just need to get the vendor payment approved.
Payment processing can stall because of high volumes – both of the payments themselves and manual steps in the authorization workflow. But timely payment doesn’t just steer you clear of late fees. Avoiding late payment also strengthens supplier relationships.
Every Accounts Payable team therefore needs to be able to clearly see any pinch points and approval conflicts in the process, in real time. Similarly, a payment approval process that relies on emails, rather than efficient accounts payable automation, can also slow down the workflow.

Tip: Celonis’s Parked & Blocked Invoices App gives you a centralized view of all your non-cleared invoices, intelligently sorted by status and urgency so you can prioritize them. The app can even guide you straight to root causes, enabling you to triage and remedy all in one place so you never miss a stray invoice.

4. Processing a payment

The invoice is paid, but the Accounts Payable team’s job isn’t done just yet. Finally, they need to check the Accounts Payable ledger.
But the books can make for disappointing reading – a graveyard of missed deadlines that squandered early payment discounts, all down to a lack of real-time visibility over the AP process. Improving on-time payment and days payable outstanding depends on eliminating blindspots, driving automation, and finding opportunities to reduce touches in the payment process.

Tip: The Celonis Process Intelligence platform gives you end-to-end visibility, so you can resolve bottlenecks in your AP process.