A supplier is chasing payment while a customer invoice sits overdue. Both appear as outstanding balances, but resolving them may require entirely different work: confirming a delivery on one side and settling a billing dispute on the other.
Before adding reminders or automation, find out what each transaction is waiting for and who can move it forward. This guide follows the common hold-ups in accounts payable and accounts receivable, with practical fixes for the hand-offs behind them.
How do you find the bottleneck?
Follow a recent batch of invoices from start to finish, including the ones still open. Record when each item arrived, changed state and reached the person responsible for its next step. Separate time spent working on an invoice from time it spent waiting.
For AP, trace receipt, coding, approval, payment release and settlement. For AR, trace the billing trigger, invoice delivery, due date, follow-up and cash allocation. A single status such as “processed” hides those handoffs.
| What the team sees | What to check first | Who should investigate |
|---|---|---|
| AP: bills sit in draft | Missing entity, coding or purchase evidence | AP owner and purchaser |
| AP: approvals age | Routing, decision limits and absence cover | Budget owner |
| AP: approved bills remain unpaid | Payment date, release authority and bank response | Payment owner |
| AR: customers reject invoices | Contract terms, billing entity and PO reference | Billing owner |
| AR: overdue balances keep growing | Delivery, disputes and promised payment dates | Collections owner |
| AR: paid invoices still look open | Bank receipts, remittances and allocation | Reconciliation owner |
Assign these responsibilities to named people in your team. One person may cover several roles, but each blocked item needs an owner who can act. Review both age and value: a growing queue of small errors can consume more time than one large invoice.
Where do accounts payable workflows get stuck?
Invoices arrive without enough information
A bill in an employee's inbox can be invisible to AP until the supplier chases it. Use a shared intake route and make sure the purchaser supplies the legal entity, business purpose and supporting order or service confirmation.
When the bill reaches finance, check the supplier, invoice number, currency, amounts and coding against the source. OCR can extract text; it cannot guarantee that an invoice is correct or that the proposed accounting treatment fits the purchase. Keep uncertain fields in review.
Owner and measure: AP owns the intake queue; the purchaser supplies missing context. Track time from receipt to a complete draft and the number of bills returned for missing information.
Approval waits for a decision nobody owns
Look at the oldest pending bills. Is the approver absent, outside their decision limit or waiting for evidence? Each cause needs a different response. An absence needs authorised cover. Missing evidence needs the purchaser. A disputed amount needs a decision under the company's policy.
Give the approver the invoice, coding, purchase context and reason for any exception. Where a purchase requires receiving evidence, an invoice total that matches the PO does not prove delivery. The three way matching guide explains that distinction.
Owner and measure: The budget owner resolves the decision; finance maintains the routing rules. Track time awaiting approval, repeat rejections and items with no assigned approver. The accounting workflow guide covers how to define the rules and fallback route.
Approval finishes but payment does not
A bill can pass approval and still wait for its scheduled payment date, a bank authorisation or correction of a rejected instruction. Give the payment owner visibility of each state, including returned payments. Check the bank response before retrying an instruction whose outcome is uncertain.
Keep cost approval, supplier-detail changes and payment release distinct. Verify a requested bank-detail change through a separate, trusted channel before using it. The FBI's business email compromise guidance recommends secondary-channel verification for account changes.
Owner and measure: The payment owner investigates release and settlement; an authorised verifier checks bank-detail changes. Track failed payments and approved bills past their intended payment date, excluding those deliberately held under an agreed policy.
Use Accounts payable automation: invoice to payment when the diagnosis points to a software change. It sets out the cases a supplier-invoice pilot should prove.
Where do accounts receivable workflows get stuck?
Billing starts from incomplete or outdated terms
A customer may reject an invoice because it names the wrong entity, misses a required PO or reflects the contract before an amendment. Fix the source of the error before sending the next billing run.
Agree what authorises billing, who confirms the terms and which contact receives the invoice. Check changes to price, billing period, currency and customer details against the approved agreement. Record delivery failures separately from disputes about the charge.
Owner and measure: Billing owns invoice accuracy; the commercial owner confirms the agreement and changes. Track time from the agreed billing trigger to invoice issue, invoice corrections and failed deliveries.
Overdue invoices have no next action
An ageing bucket tells you how long a balance has been overdue. It does not explain why. Separate invoices awaiting a routine reminder from disputed charges, promised payments, failed collections and customers who say they have already paid.
Give each exception a next action, owner and review date. Route a delivery dispute to the person who can resolve it. Check the current balance before following up, and agree how the team handles sensitive accounts and reminder holds. Test how the chosen system applies those decisions to invoices already in progress.
Owner and measure: Collections owns follow-up; the account or service owner resolves commercial disputes. Track overdue value by reason, dispute age and missed payment commitments. More reminders alone do not demonstrate better collections.
Cash arrives but nobody can allocate it
A receipt may cover several invoices, arrive without a useful reference or differ from the invoice because of fees or a partial payment. The bank receipt alone may not explain which balance the customer intended to settle.
Use remittance advice and transaction evidence to allocate the cash. Keep any unexplained remainder visible for investigation. Do not use an adjustment solely to make the difference disappear. Check allocations before chasing a customer who says they have paid.
Owner and measure: The reconciliation owner investigates unmatched receipts and requests missing evidence. Track the age and value of unapplied cash and the time spent resolving it. The payment reconciliation guide covers partial payments and combined receipts.
The accounts receivable automation guide turns these billing, collections and allocation cases into a software evaluation.
How can Light support these workflows?
Light's bill payment software connects supplier invoice capture, coding, approval and payment with the ledger. Its accounting workflows support approval conditions such as entity, vendor and amount. Finance still needs to define the approvers, evidence and treatment of exceptions.
On the customer side, Light's accounts receivable and subscription management connects contracts, invoices, customer credits and payment matching. Light also supports configured payment-reminder workflows for eligible invoices. Verify the payment methods covered, recipient details and reminder steps during setup; invoice posting alone does not establish that an email reminder will go out.
Follow a bill and a customer invoice through the proposed setup, including a rejected payment, a partial receipt and a dispute. Confirm the bank connection and workflow behaviour for the entities you use before expanding automation.
How do you know the fix worked?
Choose one queue and record the starting position before changing its process. Keep the definition of completion consistent: approval, payment release, settlement and cash allocation are different milestones.
Compare a similar mix of transactions over a complete operating cycle. Record active handling time, elapsed waiting time, corrections and the age of unresolved items. Include the work required to maintain rules or repair a failed connection. Keep still-open items in the review so a faster completion average cannot hide the oldest backlog.
Use days sales outstanding alongside those measures. Changes in payment terms, customer mix and the timing of sales can move DSO without showing whether a collections handoff improved. For AP, distinguish payment on agreed terms from clearing an approval queue faster.
Start with the oldest recurring cause that the team can resolve, give someone responsibility for the change and check the same measures after the next cycle. That creates a reason to expand automation based on the work it removes.
