The invoice lifecycle is the path a supplier invoice takes from arriving to being paid and filed. Seven stages, in most businesses.
Worth knowing the stages separately rather than as one blur called "doing the invoices", because they fail differently and only one of them is usually your problem.
The seven stages
1. Receipt. The invoice arrives — by email, by post, occasionally as a photograph from someone on a site. It exists as a document but not yet as a record.
2. Identification. Somebody works out what it is. Invoice, credit note, statement, pro-forma, or a duplicate of something already entered. Sounds trivial and isn't: statements look enough like invoices that entering one double-counts everything on it.
3. Capture. The values come off the document — supplier, date, reference, net, VAT, gross, and the lines if you need them.
4. Coding. Which nominal account, which VAT treatment, which job or department. This is the stage that needs someone who knows the business rather than someone who can read.
5. Approval. The person accountable for the spend confirms it should be paid.
6. Payment. Usually in a run rather than individually.
7. Filing and retention. The document is attached to the transaction and kept for the retention period — six years in the UK, ten in Germany, and counted from the end of the accounting period rather than the invoice date.
Where the time actually goes
Here's the part that surprises people who measure it. Take a typical invoice paid 27 days after it arrived, and add up the time anyone spent doing something to it: often around ten minutes across three people.
The other 27 days are queue time — the invoice sitting between stages while nobody is working on it.
| Gap | Typical cause |
|---|---|
| Receipt → capture | Entry happens weekly or monthly, not on arrival |
| Capture → approval | No visible queue; the request is an email with no state |
| Approval → payment | Payment runs are fortnightly or monthly |
Almost every attempt to speed up AP goes after stages 3 and 4, which is where the work is. Almost all the elapsed time is in the gaps between stages.
If ten minutes of work is spread across 27 days, halving the work saves five minutes. Removing one week of queue saves a week.
The stage that's usually the problem
Receipt to capture, and it's the one nobody counts — because from the ledger's point of view the invoice doesn't exist yet.
If you enter invoices weekly, an invoice arriving the day after a session waits an average of three days before anyone looks at it. Monthly, and it's a fortnight. During that time it isn't late, isn't overdue, and isn't on any report. It's simply invisible.
This is also where invoices get lost rather than merely delayed. An invoice that has become a record can be late, queried or disputed. It can't be lost, because something is keeping score.
What each stage needs to be healthy
Receipt — one address everything goes to, rather than personal inboxes.
Identification — a rule that statements are never entered, only reconciled.
Capture — accuracy on the fields that matter, and a way to know which ones were uncertain. A wrong date costs you ten seconds at reconciliation. A wrong bank account costs you the payment.
Coding — supplier defaults set once rather than a decision every time.
Approval — a visible queue and a value threshold, so small recurring invoices from known suppliers don't get routed at all.
Payment — often enough that approval isn't waiting a fortnight for the next run.
Filing — the document attached to the transaction, so retrieval is by transaction rather than by memory.
Measuring your own
You don't need software. Take twenty invoices you've recently paid and record four dates for each: received, entered, approved, paid.
Then look at the three gaps. One of them will dominate — usually the first. Fix that one; the others are noise until it's addressed. Redo it after any change, because the bottleneck moves rather than disappearing.
Most people have never done this, and the answer is rarely the stage they assumed.
Cribble handles stages 1 to 4 — documents arrive at one address, get identified, read to the line item and coded, then posted into Xero or exported as CSV. Stages 5 to 7 stay yours, which is where the judgment lives.