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I2P and Accounts Payable Workflow

By Annapoorna

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Updated on: Oct 19th, 2023

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2 min read

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The two most important components of a business workflow are the revenue cycle and expenditure cycle. The Invoice to pay process is one of the sub-components under the expenditure cycle.

Meaning of  I2P (Invoice-to-Pay)

Invoice to Pay (I2P) is a process that focuses on streamlining the activities involved in managing supplier payments. The request for the payment of goods or services provided by the supplier is covered under Invoice to Pay. It is the introductory step in the purchase-to-pay processing cycle.

Template and format of Invoice to Pay workflow 


I2P (Invoice-to-Pay) workflow explained

  • Receipt of invoice and invoice segregation

Once the invoice is received from the client, the first step is to determine how that particular invoice has to be segregated. Invoices are often sent through different modes – physical copies, copies through email and fax in various formats. Based on this, the invoice so received will be segregated to be easy to track and refer whenever needed.

  • Invoice data entry

Once the segregation is done, the necessary details contained in the invoice have to be entered into the system. Manual entry is often riddled with errors in name or amounts entered incorrectly. Moreover, it is a time-consuming process. The business deals with a large influx of invoices. It makes more sense to opt for image scanning and automation using technology such as OCR. 

  • Invoice verification and payment approval

Once the entry is made, all the details entered have to be checked against the invoice for verification purposes. If any discrepancies exist, the changes should be made accordingly, and the entry should be updated. Once the invoice and the data entered are verified successfully and matched, the invoice moves along to the approval stage. Here, the approving authority gives the go-ahead for the payment to be made.

  • Recording of payment made against the invoice

Once the payment approvals are obtained, the payment has to be made to the client as per the payment mode previously agreed upon and on or before the due date for payment to avoid any fines or penalties for late payment. Once the payment is made, the same is updated in the accounting software system/ERP.

About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

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