Invoice processing is everything that happens between a supplier invoice arriving and the money leaving. Seven steps, of which six take minutes and one takes days. Knowing which is which is the difference between improving the part that was already fast and improving the part that suppliers actually notice.
Arrival, capture and validation
The invoice reaches a monitored address and the date is recorded, because payment terms usually run from it. It is captured into a record as structured fields. Then it is validated against what you already know: is the supplier ours, is the number new, does the arithmetic work, do the bank details match. Minutes, and largely automatable.
Matching and approval
Compared against the purchase order and the goods receipt within tolerance, and routed to whoever has authority for that spend. Matching takes seconds when the documents exist and cannot happen when they do not. Approval is the step that takes days, because it depends on somebody outside finance opening their queue.
Coding and payment
Assigned to an account and cost centre, ideally inherited from the order rather than reconstructed, then scheduled into a payment run, released by a second person and paid, with a remittance advice telling the supplier what it covered. Mechanical, and the place where the payment controls live rather than the verification ones.
Questions people ask about what is invoice processing
Which step takes longest?
Approval, in almost every organisation that measures it. The work in it takes a minute; the waiting takes days.
How much can be automated?
Arrival routing, capture, validation, matching, approval routing and payment scheduling. Coding is assisted and exceptions are conversations.
What is the cheapest improvement?
Consolidating arrival channels so nothing reaches an individual's inbox. It costs nothing and closes the biggest leak.