Invoice processing & accounts payable SOP template

Accounts payable fails in two ways: paying things you shouldn’t (duplicates, fraud, unapproved spend) and not paying things you should (late fees, damaged vendor trust). Both come from the same gap — no written path from invoice arrival to reconciled payment. This template is that path.

Receiving invoices

One front door

All invoices arrive at one address (ap@yourcompany.com or the AP tool’s inbox) — never to personal inboxes. Invoices that arrive elsewhere get forwarded to the front door before anything else happens, so the queue is the single source of what’s owed.

Capture on arrival

Log each invoice with: vendor, amount, currency, invoice number, issue and due dates, and what it’s for. Duplicate detection starts here — flag any invoice number already in the log before it goes one step further.

Verification

Three-way match, right-sized

Match the invoice against (1) the purchase order or written approval that authorized the spend and (2) evidence of receipt — the delivered goods, the active subscription, the completed work. No matching authorization means the invoice pauses and the requester (not the vendor) explains. For small recurring charges under an agreed threshold, a standing approval on the vendor record replaces the per-invoice match.

Verify banking changes out-of-band

Any invoice with new or changed bank details triggers a verification call to the vendor on a known number — never the number printed on the invoice itself. This single habit blocks the most common AP fraud pattern in existence.

Approval

Thresholds, in writing

Example shape — adapt the numbers: under $500 with a matched PO, AP approves directly; $500–$5,000 needs the budget owner; above $5,000 adds a director or founder. The approver may never be the person who requested the spend, and neither may be the person who executes payment. Two people minimum touch every payment — separation of duties is the whole game.

Approval lives on the record

Approvals happen in the AP tool or by reply on the invoice thread — somewhere attached to the invoice, timestamped. A verbal OK in a hallway does not exist.

Payment

Pay on schedule, not on arrival

Run payments in batches (weekly is plenty for most teams) against due dates. Early payment is a discount negotiation, not a default. Record the payment reference against the invoice at execution.

Reconciliation and records

Close the loop monthly

Every statement line matches a logged invoice and payment; every logged invoice matches a statement line or has a status (scheduled, disputed, on hold). Unmatched items get resolved within the month they appear — a mystery line item ages like milk.

Keep what audits need

Retain invoice, approval trail, and payment reference together, for your jurisdiction’s retention window. When the auditor asks “who approved this and when?”, the answer should be a link, not a memory.