The AP visibility gap: How one missing invoice left a company $50,000 behind
by Hannah Khouri
The CFO walks into an AP lead’s office and poses a simple question: “How many invoices does the team process each month?” But instead of a number, they’re met with a shrug or a vague promise of “Let me get back to you on that.”
This scene plays out more often than many people realize.
There’s no doubt invoices are being processed. Every day, they come in via mail, email, and EDI, and the team works hard to get each one approved and paid on time.
But processing invoices doesn’t necessarily mean you have clear AP visibility. How many invoices came in this month? Is that more or less than last month? Are any invoices sitting somewhere and never making it into the process?
When teams are stuck in the day-to-day grind of sorting through and moving along invoices, those questions can be surprisingly difficult to answer. And sometimes, they’re unaware that something has slipped through the cracks until a vendor asks why they haven’t gotten paid yet.
The invoice volume question nobody can answer
The idea of a company not knowing its own invoice volume might seem surprising. But the truth is that for many AP teams, there’s never really been an easy way to calculate it.
Invoice volume tracking gets especially tricky when invoices enter the business through multiple channels. Some arrive in a shared AP inbox. Others go to individual location managers or are handed off at the loading dock when deliveries arrive. EDI invoices might flow through a completely different system.
By the time AP actually sees an invoice, it may have taken a very different route than the one before it.
When invoices are coming from all directions, invoice volume tracking is much more complicated than simply tallying up what’s in the accounting system. Sure, the invoices that made it into the system are visible and countable. But what about the ones sitting in someone’s inbox or lost in a stack of paperwork? Or how about the ones that were never received in the first place?
Let’s face it: AP can’t track something if they don’t know it exists.
As a business grows, accounts payable visibility gaps often do, too. More locations often means more vendors and more invoices. It also means more opportunities for something to happen outside of AP’s line of sight.
AP visibility gaps aren’t the fault of one employee or the result of a single mistake. In fact, a team could process every invoice it receives correctly and still not have a complete picture of what’s happening across the business. This is a structural problem, not a people problem.
The way an AP leader answers the question, “How many invoices do we process every month?” can reveal a lot. If there’s no simple, reliable way to answer it, there’s likely not a reliable way to know when something is missing.
When a missing invoice becomes a $50,000 problem
A missing invoice is easy to overlook, especially for a team that’s busy processing a lot of them. If the invoice wasn’t received in the first place, it never enters the approval workflow, appears on an aging report, or gives the AP team an obvious reason to go looking for it.
Essentially, that missing invoice is invisible. That is, until it snowballs into a bigger, more expensive problem.
One company learned the impact of an AP visibility gap firsthand.
Pepsi was one of this company’s suppliers. But over the course of four months, several invoices from Pepsi never reached the AP team.
For months, business carried on as usual, and AP staff continued processing the invoices they did receive. There were no obvious signs of missing invoices. As far as the AP team could see, everything was moving along as usual.
That is, until Pepsi called.
Pepsi’s records showed a large outstanding balance, and they had one pressing question: “Why haven’t we been paid?”
The company was blindsided. As they dug into what went wrong, it became clear that several of Pepsi’s invoices were never sent. Because the invoices never came in, they were never entered into the company’s AP process. That meant nothing sat in an approval queue or aging report to alert the team that something was wrong.
It was as if the invoices never existed.
By the time the missing invoices finally surfaced, the company was $50,000 behind on payments.
Nobody decided to stop tracking those invoices. The tracking just never existed in the first place.
The approval that wasn’t actually an approval
In some cases, the AP visibility gap is about what’s missing, like the invoices in our Pepsi story. Other times, it shows up in a process that appears to be working as intended.
One company had a purchase order process in place, which, in theory, is a good control. POs provide a record of what the company agreed to purchase and the associated costs. When invoices come in, the AP team could match them to the corresponding POs to ensure they’re being charged for what they agreed to.
But that’s not exactly how this company used POs.
This company found itself inundated with a particularly high volume of invoices. In fact, the company’s controller was so overwhelmed that the team started creating POs after invoices came in. Essentially, the team used the PO process as a stand-in for approvals.
From the controller’s perspective, this appeared to be working. Invoices came in, POs were created, and payments were made. The team had an established workflow and was following it.
But because POs were created after invoices arrived, they didn’t actually serve their original purpose of authorizing purchases before they were made.
What the team really needed was a more efficient way to route invoices to the right approvers before payment was made. Typically, a purchase order comes earlier in the process, documenting what the company has agreed to buy before the purchase is made. Invoice approvals come later on. Their purpose is to confirm that everything arrived, the amount is correct, and the invoice is ready to be paid.
Taking a closer look at how invoices moved through the business made it easier to understand why the PO process evolved the way it did. The team had a problem with invoice approvals at scale, and they were trying to solve it with a process that was already available to them.
Once the company had a dedicated approval workflow in place, this PO workaround was no longer necessary. The team could route invoices to the right approvers without creating a PO after the fact just to keep the invoice moving forward.
What changes with better AP visibility
Better AP visibility gives teams a fuller picture of the entire invoice-to-payment process. They can more easily spot things that are easy to overlook when everyone is busy trying to keep invoices moving.
It all starts with knowing exactly what’s coming in. When invoices are tracked in one place, AP teams can confidently answer, “How many invoices are we processing?” They can see invoice volume, where it’s coming from, and whether it is changing over time.
It also makes it easier to spot when something is amiss, like when a long-standing vendor’s invoices suddenly stop showing up.
Visibility also helps teams see where every invoice stands after it’s arrived. Instead of making guesses and endlessly following up with approvers, teams can see exactly where an invoice is in the process, how long it’s been there, and what needs to happen to move it forward.
AP teams also have more visibility into the processes surrounding invoices. When purchase orders, approval workflows, and invoice data are connected, teams know whether each step is working as it should and where AP process gaps need to be addressed.
For AP managers and controllers, better accounts payable visibility means fewer surprises down the road. An overwhelmed team can see where approvals are creating more work and address the issue before workarounds become part of the process. Follow up on a stalled approval before it leads to a late payment. And a missing invoice from a long-time supplier can be investigated and addressed before it snowballs into $50,000 in back payments.
AP teams have a lot to manage, and that’s not going to change. AP visibility helps them know where to look and what needs their attention.
It’s time to close the AP visibility gaps
The next time the CFO asks, “How many invoices do we process every month?” the answer shouldn’t take the form of a shrug or a promise to crunch some numbers and get back to them.
Better AP visibility means being ready with a confident answer on invoice volume, as well as a clear view of what came in, where everything stands in the process, and where something might be missing.
Greater AP visibility is especially important as a business grows. Growth often brings more locations, more vendors, and more invoices to juggle. Having a clear view of these moving pieces makes it easier to see where everything stands and catch small gaps before they grow into larger, more expensive problems.
Ottimate brings invoices and approval workflows into one place so AP teams have better visibility across the entire invoice-to-payment process. Teams no longer need to rely on workarounds to keep invoices moving or wait for vendors to flag a problem. They have the information they need to know what’s happening with their invoices and where their attention is needed.
Want to see what better AP visibility could look like for your organization? Book your free Ottimate demo to see firsthand.
