Aged receivables: the report to check every week
Invoicing is not the same as getting paid. How to read the aged receivables report, why it deserves a weekly look and how to turn it into concrete action.
Processes · 4 min read
Supplier invoices waiting for sign-off cost more than they seem. How to set up checks, thresholds and delegations so that every payment is authorized without slowing work down.
In many companies, accounts payable runs on inertia. The supplier’s invoice arrives, someone forwards it to the manager who placed the order, the manager looks at it when they have time, and sooner or later the sign-off finds its way back to finance. While volumes are low the system holds up; as they grow, invoices start getting lost among inboxes, absences and competing priorities.
The consequences are real. Late payments that strain supplier relationships, early-payment discounts never taken, reminders reaching finance with nobody knowing where the invoice ended up. And at the other extreme, the risk of paying for goods never received or services not delivered as agreed, because nobody actually checked.
A solid payables process starts by comparing three documents: the purchase order, which states what was requested and at what price; the goods receipt, which confirms what actually arrived; and the invoice, which states what the supplier is charging. If the three match, the invoice can go through almost automatically.
The differences are where the real work lies. A price that differs from the one agreed, an invoiced quantity higher than the one received, a transport charge nobody expected. It helps to set tolerances in advance, for example accepting small rounding differences without intervention, and to keep the manager’s attention for the variances that matter.
For services, where there are no goods to receive, the receipt becomes a confirmation from whoever used the service: a progress report, a completed task, a simple approval from the internal contact.
When an invoice does not match an order, or exceeds the tolerances, it needs explicit approval. The simplest solution is a matrix that links amount and cost center to the level of authorization required: the department head for routine spending, the controller above a certain threshold, senior management for the largest amounts.
Two precautions prevent a lot of trouble. The first is delegation: every approver needs a stand-in for vacations and absences, otherwise one week of leave blocks an entire department. The second is segregation of duties: whoever orders a purchase should not be the only person approving its payment, especially above certain amounts.
An approval flow only makes sense if it has deadlines. Deciding that an invoice must be approved within a few working days of receipt, with an automatic reminder and an escalation if the deadline passes, turns sign-off from a personal favor into an organizational commitment.
At the same time, finance must be able to see at any moment where each invoice is and when it falls due. That makes it possible to plan payments in an orderly way, for example with a weekly payment run, to prioritize strategic suppliers and to take discounts when cash allows, instead of deciding at the last minute under pressure from reminders.
Supplier relationships benefit too. A supplier who knows when they will be paid, and who hears clearly when their invoice shows a difference, has no need to call every week for news. Fewer incoming calls mean more time for the finance team and a calmer relationship for both sides.
Informal approval
Structured flow
Every approval should leave a trail: who approved, when, on which version of the document and with what notes, if any. This is not bureaucracy, but a ready answer to the questions that sooner or later come from an auditor, an internal control or simply a supplier disputing a partial payment.
In Finance, supplier invoices received through SDI are automatically matched to purchase orders and receipts, while those with differences or no order are routed to the right approver based on amount and cost center. Approvals can be given from a smartphone, delegations cover absences and every step is logged, with the evidence available in Regulate for financial controls. Payment goes out when everything is in order, and not before.
A well-designed approval flow does not slow payments down: it takes the uncertainty out of them.
Keep reading
Invoicing is not the same as getting paid. How to read the aged receivables report, why it deserves a weekly look and how to turn it into concrete action.
Matching every transaction to its document is the only way to know what has really been paid. A practical method for doing it every day and leaving only the exceptions to your team.
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