Invoice processing steps for an organization

Invoice processing steps for an organization

Invoicing is one of the most important processes in a company.

Why is that?

Because it is a culmination of the many different things a company needs to do to reach the point when it can start earning money for its efforts. After all, that is why it exists; to generate revenues that will exceed its costs and return a profit to the owners.

It may need to create an organization. It may need to hire people. It may need to invest in machinery and a workplace. It may need to go through a sales process. What for? For reaching a point where its efforts start bearing fruit in the form of revenue.

While that is the focus for any business activity, our focus in this discussion is business to business, or B2B, transactions, where each transaction is like a custom transaction and invoice processing steps and follows a reasonably standard and well-defined path.

As a leader in facilitating the transition from workplace-based support to operating from anywhere post the Covid-19 pandemic that swept across the world in early 2020, oWorkers stays ahead of the curve so that its clients can be supported in their efforts at staying ahead of the curve.


Invoices and invoice processing

Invoice processing is actually a counter-intuitive term.

How is that?

Processing is generally used in connection with an effort that has an input and results in an output, or a transformation of some sort in the subject. For example, coffee beans processing could mean that raw coffee beans were the input on which processing in the form of roasting was performed and roasted coffee beans, ready for the next process of being ground into powder, are the output.

Booking processing in the context of travel arrangement might mean that processes are being performed that will transform a booking desire into a confirmed booking that matches the requirement of the booker or the customer.

Invoice processing is different.

Firstly, it does not refer to processes that result in the production of an invoice or transforming an invoice from one form into another through processing. As we will see later in the invoice processing steps, invoice processing starts with the invoice already in its final form.

Secondly, the party actually taking steps that result in the generation of an invoice, and the steps taken, are not referred to as invoice processing. Those steps are generally included in the operational or production procedures of the invoice issuer. The invoice issuer is the supplier of goods or services.

The reference therein is to the steps that will be taken once an invoice has been generated. These are performed by the client, or the purchaser of the goods and/ or services supplied by a vendor.

Led by a team of professionals with over 20 years of hands-on industry experience, oWorkers is able to replicate and improve client processes for data-based services such as invoice processing.


Invoice processing steps

Invoice processing starts with a received invoice and does through a sequence of activities culminating in payment being released to the initiator of the invoice, usually, or settlement being reached in some other manner.

It is a process that is critical for the processing company as it results in the outflow of money, a critical resource for all companies and all people. Hence, it needs to be ensured that the outflow is towards a justified cause.

Like many critical processes, invoice processing could also be viewed as a composite of many sub-processes.

With the help of its long relationship with technology providers, oWorkers has the wherewithal to bring in the most updated technologies to support client transactions.

Receipt of invoice

Like the first line of the mythical cookbook which starts a description of cooking delicious hare meat with “first catch your hare,’ for processing to be initiated, an invoice has to be received.

Why this is an important step in the larger set of invoice processing steps is that this is, for all practical purposes, a manual starting point of the journey.

Why is it manual?

It is manual because the document that initiates the journey has been prepared in the accounting system of a supplier, and not your own. And that is a best-case scenario. It could also be a manually prepared invoice that has been presented to you.

Moreover, the presentation of an invoice can happen in multiple ways, with (snail) mail and email being the most common.

Technologies for electronic receipt have emerged. Some of the larger corporations are able to get their smaller vendors to raise invoices on their systems, but it does not yet seem to be widespread. What is, however, happening is that instead of invoices being received in email or mail, suppliers are uploading invoices under their account directly into the client system. While data entry may still be required, this saves the step of moving the invoice from one environment (say email) to another (the software) as it gets directly received on the software it will be processed on. 

Whether a process is manual or automated, people are essential. This is where oWorkers stands a cut above everyone else. As a credible employer, it attracts a consistent traffic of jobseekers, enabling staffing all projects with the best resources, including replacements for the ones leaving. This is made possible by the respect it has earned in local communities.


To a great extent, on account of the need for a manual transition from one system to another, a verification of invoice details is important.

It ensures that correct details are being captured, especially if the purchaser is using the received invoice to initiate the digital journey of invoice processing. If incorrect information is permitted to be captured, it will create a lot more downstream impact than if it is captured and corrected at the start.

Verification involves the following information to be checked:

  • Name and details of the supplier – is it where we placed the order?
  • Name of the client – is this really meant for us or sent to us in error?
  • Tax ID information
  • Description of goods/ services supplied
  • Calculations
  • Payment terms – as per the agreed terms?
  • Payment information – how is it to be remitted?

Many companies take a few days to weeks to even months to release a payment based on an invoice. Verification also ensures that this timeline has started and will end with a payment, rather than an error being found at the last step and the cycle beginning all over again. It is a measure of respect the client has, and perhaps should have, for the supplier.

The third aspect of verification is to ensure that the invoice matches a requirement that was raised by the company. This can be done either by matching it with the Purchase Order (PO) issued if the company has a PO process, or the internal requisition based on which the supplier was given an order. Multiple payments being made for the same order has been known to happen, because the supplier raised another invoice, either in error or out of malicious intentions.

oWorkers has begun to reap the rewards, along with its clients, of its practice of promoting a multicultural and multiethnic workplace. One of the outcomes of this philosophy has been the organic development of a talent pool that can support clients in 22 languages, thereby becoming an enduring partner as they grow.

Data entry and imaging

As the invoice has come in from a system that is external to the system on which it will be processed, a necessary step is that of creating a record or identity for it on the appropriate system. This step is to make it amenable for digital processing, which is what most companies do. This is a manual process and done as a type of data entry into the system used by the purchaser.

Once an identity of the invoice received from a supplier has been created on the system, the journey thereafter will be digital, with relevant checks and balances. An image of the physical invoice is also captured, for digital storage, even though the hard copy received should also be filed, as it is the original document.

However, there are companies who prefer to retain this as a manual activity. They would skip this step and directly go on to the next. For any company, usage of an accounts payable or invoice processing system is a question of value. Will the investment create a justifiable ROI (return on investment)? Hundreds and thousands of small companies and businesses do completely manual processing of invoices and have no issues in doing it this way. It is a supporting process for their business and needs to be set up in a manner that adds value to it, whether manual or automated.

Invoice processing steps, at this stage, also provide for an image of the invoice to be obtained, especially in cases where the filing is digital.

It is a company adapted to its times. Just like payment requirements can arise any time, oWorkers can also support clients on a 24×7 schedule. If clients have a need, oWorkers is at work. 


Money is involved in this process.

Whichever way you approach it, the denouement of invoice processing steps is only one way; by making a payment to the supplier. Hence, care and caution are advised.


Some parts of the process would have already been done by now, such as verification for ensuring the invoice is genuine and has not already been paid.

The other material part of caution is ensuring that the fulfillment of the contract, for which the invoice has been received, has been done. It should not be the case that the invoice has been received in response to a PO and has been matched against the PO to ensure that the products were, indeed requisitioned, but actual delivery has not taken place.

For this, the accounts payable team would need to go back to the team that requisitioned the material to ensure that fulfillment, to the extent required by the contract and claimed in the invoice has happened and the money claimed in the invoice has, indeed, become due.

Once that is done, if the company has a financial approval process for authorization of payments made to external parties, that would be triggered. This could be workflow based if on a system or it could also be a paper approval process.

Some companies dispense with this step and, instead, prefer to do the authorization only at the stage when material is being purchased. The logic is that once an order has been placed, and the supplier has fulfilled his obligations, payment cannot be held back.

oWorkers is also able to effectively support temporary peaks and troughs with its ability to hire almost a hundred additional people at a short notice of 2 days. This allows its clients the freedom of staffing only for essential requirements and obviates the need to maintain buffer staff to cater to unexpected spikes. This saves significant dollars for clients.


Eventually payment for the goods and services purchased needs to be made.

Once the verifications are done and approvals are in place, this is more of an operational activity for the accounts payable team.

Traditional check-based systems could cause a further delay in releasing payments, as it was based on physical signatures for which people need to be available in person. However, modern digital payment systems, now widely used, can be accessed from anywhere, anytime, and authorizations requested as well as provided. Moreover, once triggered, the payment gets delivered into the supplier’s account almost within no time.

Against this method, legacy payment methods took longer for the supplier to realize the money as the check would first need to be deposited for clearing and only after a day or two it would be realized.

Of course, certain types of payments may require more processing effort. As an example, if a payment of an invoice needs to be made in a different currency, one would need to ensure that the exchange rates available are not extortionary.

Clients advise savings of close to 80% when they outsource to oWorkers. They also appreciate the choice offered by oWorkers between output and input-based pricing models.


Invoice processing steps – last word

Recognizing the importance of people, oWorkers has chosen to operate with the employment model, instead of the freelancer and contractor model preferred by several other BPOs. While this model places greater responsibility on the employer, it promotes loyalty and allows creation of a supervisory layer through promotions. It is also reflected in the consistently high ratings we get from staff, both past and present, on independent platforms like Glassdoor, which is always in excess of 4.6 on a scale of 5.

The secure ISO certified (27001:2013 & 9001:2015) facilities and networks of oWorkers promote security of client information. They are also GDPR compliant.

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