What is the accounts payable cycle?

The accounts payable cycle is all the steps required to pay a supplier. There are several important activities that occur in each step of the accounts payable cycle.

These activities include:

• Vetting a supplier and setting them up in the vendor master database
• Placing an order
• Receiving paper and electronic invoices
• Extracting and validating invoice data
• Two- and three-way matching of invoices to purchase orders and goods and service receipt
• Routing invoices for approval
• Posting invoices to an ERP or accounting system
• Paying suppliers via check or electronic payment
• Reconciling invoices and payments

Manual and semi-automated processes slow the accounts payable cycle down, resulting in late payments, missed early payment discounts, more inquiries from suppliers regarding the status of invoices, and poor visibility into outstanding liabilities.

Cloud-based accounts payable solutions can help automate the function of AP including: supplier management, digital mailroom, supplier portal, intelligent data capture, dynamic workflows, ERP integration and invoice analytics that enable AP departments to improve their performance.