What is invoice processing? A guide to streamlining accounts payable

Invoice processing sits at the heart of accounts payable (AP) yet it’s often slower and more labour-intensive than it needs to be. Paper invoices, manual data entry and fragmented approval workflows can incur delays, errors and unnecessary costs. Over time these issues affect cash flow and supplier relationships while making it tough for finance teams to maintain financial control.

This guide explains what invoice processing involves and how automation and analytics can streamline workflows, reduce human error and give organisations better oversight over their payment processes.
 

What invoice processing really means

Invoice processing is the workflow your accounts payable team uses to receive, review and pay supplier invoices. It connects invoice data to purchase orders and the accounting system to ensure costs land accurately in the general ledger. 

How money moves through an organisation also depends on invoice processing which determines how quickly teams approve invoices, record costs and can get a view on spend. 

Because it sits within the wider procure-to-pay cycle invoice processing plays a direct role in cash flow, financial reporting and vendor relationships. This makes invoice processing a core process rather than a back-office task.
 

The typical invoice lifecycle

Most invoice processing follows a predictable path from invoice receipt through approval to payment. Here’s what the invoice lifecycle typically involves:

1. Invoices arrive in paper form, as PDFs or via digital submissions

2. Teams capture data using data extraction or optical character recognition (OCR)

3. Systems validate invoices against purchase orders and delivery records

4. Invoices move through approval workflows and routing

5. Finance teams schedule invoice payment through the accounting or enterprise resource planning (ERP) system.
    

Manual vs automated workflows

Understanding the difference between manual and automated systems helps finance teams identify where inefficiencies and risk are interfering in processes.

Manual invoice processing relies on individually enacted data entry, email approvals and spreadsheet tracking. These processes are time-consuming, increase the likelihood of human error and make it harder to spot discrepancies or late payments.

Automated invoice processing uses data capture, validation rules and routing to streamline each stage. Automated and AI-powered accounts payable solutions reduce processing time, improve accuracy and give finance teams real-time insights into invoices and approvals.
 

Why it matters for financial control

Invoice processing plays an important role in how well your finance teams can manage spend, control risk and keep cash flow predictable. But when accounts payable workflows break down issues spread quickly across reporting, approvals and supplier relationships.
 

Common challenges in accounts payable

Many accounts payable teams manage high invoice volumes across multiple systems, suppliers and payment methods. Incoming supplier invoices arrive in diverse formats, approvals sit with different stakeholders and data often lives outside a single accounting or ERP system. 

On top of this many AP teams work with unclear invoice processing workflows and manual systems. This means that teams can encounter difficulty maintaining insight, prioritising work or responding quickly when issues arise.
 

Hidden costs of manual data entry and errors

Manual invoice processing slows work at every step. Teams have to re-enter invoice data, chase approvals by email and reconcile supplier invoices across spreadsheets and disconnected systems. Yet according to a 2025 survey by cash flow management software company Agicap 13% of CFOs continue to track payments using spreadsheets rather than a dedicated invoice processing system. This ultimately limits speed and insights.

On top of the inherent slowness of handling invoice data by hand this approach increases the risk of discrepancies. When teams match purchase orders, invoices and receipts manually errors can easily occur. This extends processing time and increases costs through late payments, missed discounts and strained cash flow.

It’s a common problem too. SSON’s 2025 State of Accounts Payable report identified that matching errors is a significant issue for 41% of business leaders.
 

How good invoice management and structured workflows support compliance

The same SSON report found that 42% of business leaders struggle with invoice processing delays. These delays often stem from fragmented approvals and unclear routing. As approvals stall and invoices bounce between stakeholders, processing time increases and control weakens across accounts payable.

These disconnected workflows also make it harder to maintain a clear audit trail. They limit consistent validation and can make it harder to comply with internal purchasing processes across the accounts payable department.
 

How automation simplifies workflows

Solutions like Amazon Business use built-in automation to change invoice processing from a reactive clean-up job into a predictable, repeatable workflow. Rather than chasing invoices and fixing errors after the fact finance teams can focus on keeping work moving and making informed decisions.
 

How AI matches invoices and purchase orders

With AI-powered invoice processing, systems automatically compare supplier invoices against purchase orders as soon as they arrive. They also check line items, quantities and pricing so only genuine exceptions require active AP review. 

Automation software ensures invoices progress efficiently through the system, reducing manual data entry and the time your teams spend reconciling routine matches. You get faster invoice processing without sacrificing accuracy.
 

Using analytics to identify bottlenecks

AP automation creates cleaner invoice data because systems capture and validate information consistently at the point when invoices enter the workflow. Fewer manual handoffs mean fewer gaps, duplicates and formatting issues to fix later. 

With this foundation in place you get a better understanding of how invoices advance through your approval process. Analytics show where invoices slow down, which approvers create backlogs and where exceptions occur most often. This clarity shows you where you can optimise invoice approval workflows to keep invoices moving without the need for individual oversight.
 

Integrating automation with procurement systems

When invoice automation connects with procurement and ERP systems, teams remove silos from invoice processing. Invoices link back to purchasing activity, data flows directly into the accounting system and the audit trail stays intact. This leads to fewer handoffs, stronger control and a workflow that scales without adding work.
 

Better insights through data

Invoice data tells a fuller story than payment status alone. When teams use it consistently it becomes a window into how purchasing decisions, supplier behaviour and internal workflows perform. With the right tools you can turn invoice data into clearer insights across procurement, spend and reporting.
 

Using invoice data to improve your procurement processes

Invoice data shows how procurement decisions play out after someone places an order. By comparing supplier invoices with purchase orders you can see where pricing varies, where approvals slow down and which suppliers generate repeat issues. 

By spotting patterns earlier in the procure-to-pay cycle procurement teams can tighten processes and resolve friction before it spills into accounts payable.
 

Connecting invoices with organisation-wide spend data

Invoices show what you actually pay, not just what you plan to spend. So when you connect invoice data with organisation-wide spend data, patterns start to emerge. You might see unusual price changes, inconsistent charges or unexpected shifts in spend with a supplier. 

This shared view allows you to go beyond isolated transactions and focus on what’s changing across departments and categories. With this kind of real-time visibility you spend less time reconciling data and more time investigating spending anomalies before they turn into larger issues.
 

Using analytics for better budgeting and reporting

Analytics work best when they interpret consistent data and repeatable workflows. When invoice data flows through the process in a structured way it gives you a clearer view of how approvals move, where exceptions occur and when payments actually leave your organisation. 

This insight improves cash flow forecasting and removes guesswork from budgeting. Over time reporting becomes faster and more reliable, giving the accounts payable function a stronger role in financial planning rather than just closing the books.
 

Tools to modernise invoice management

When invoices progress cleanly from purchase to payment your finance teams stop firefighting and start staying on top of the work. Modern responsible procurement solutions mean the difference between chasing invoices and staying in control. 
 

Pay by Invoice

Pay by Invoice is an Amazon Business Prime feature that lets you group eligible purchases into a single invoice with agreed payment terms. Instead of tracking multiple transactions you manage one consolidated invoice. 

This simplifies the payment process, helps predict cash flow and reduces the time you spend handling individual invoices. For accounts payable teams it removes friction without changing how employees buy what they need.
 

Spend Visibility for reporting and audits

Spend Visibility is another Amazon Business Prime feature that gives you a clearer picture of purchasing activity across your organisation. It brings invoice and spend data together so it’s easier to understand where money goes and spot unusual patterns early. 

A better overarching perspective enables stronger reporting by helping you own a reliable audit trail without relying on manual work.
 

Reconciling faster with the Pay by Invoice report

Pay by Invoice reports bring together invoice details, payment statuses and purchasing data in a single view. Rather than piecing information together from multiple systems you can track invoiced amounts, cleared payments and outstanding items in one place. 

Consolidating this information decreases reconciliation time and reveals issues sooner. Instead of scrambling at month-end your teams can close the books with fewer surprises.
 

Move from reactive to prepared

Invoice processing affects more than just payments. It influences cash flow, accurate reporting and how confidently your finance teams control spend. But when workflows rely on manual steps, repetitive tasks and fragmented data you’re stuck reacting to issues after they arise. 

With automation, analytics and connected systems, invoice processing becomes a structured, predictable part of the process that engenders better decisions across procurement and finance.

If you’re looking to reduce work, improve visibility and bring more control into accounts payable, explore how Amazon Business’s smarter, automated approaches can keep your organisation prepared as opposed to playing catch-up.