How to track invoices

As a small business, keeping track of invoices can be an ongoing challenge. In fact, a Gateway Commercial Finance study found that 63% of small business owners reported missing a crucial business opportunity due to delayed payments.

Knowing how to track invoices is crucial for small business owners, freelancers, and finance professionals because it ensures timely payments, increases operational efficiency, and ultimately improves cash flow management.

What is invoice tracking?

Invoice tracking is the process of monitoring the status of invoices, whether you’re sending or receiving them. At any given time, you should know exactly where an invoice stands in the accounts payable or receivable cycle, from the moment you receive or send it to the day you transmit or receive payment.

Common pain points for invoice tracking include:

• Manual processes
• Data entry errors
• Missed deadlines
• Cash flow issues
• Strains on vendor/client relationships

By staying proactive with invoice tracking, businesses of all sizes can minimize errors, streamline payments, and maintain healthy financial workflows.

How to track invoices in 5 steps

While the process may vary slightly from one business to another, these five proven best practices can help any company streamline its approach to tracking invoices:

1. Use invoice management software to automate payments

Excel spreadsheets for payment tracking might work in a pinch, but they can slow you down as your business grows. Modern tools automate invoice processing from end to end, pulling details from incoming invoices, initiating approvals, and tracking payments so you spend less time on manual work.

The key benefits of invoice management software include:

• Simplified workflows
• Streamlined AP approvals
• Quicker payments
• Time savings
• Error reduction
• Automatic payment reminders

One crucial aspect of any software offering is whether it integrates with your existing accounting software. This ensures a streamlined financial data workflow and reduces duplication and errors.

2. Standardize your invoicing process

Use consistent formats to capture critical details, such as invoice numbers, amounts, and due dates. A standard, repeatable process improves invoice tracking by:

• Reducing client/vendor confusion
• Serving as an extension of your brand
• Making invoices easier to track
• Reducing errors

There are various invoice tracker templates available for you to try out. Free options include:

• Google Sheets
• Microsoft Office templates
• Ramp's free invoice generator

3. Set up payment reminders and alerts

You can reduce late payments and missed deadlines by setting automated reminders for your vendors. The best tools let you send alerts in whatever format your vendors prefer:

• Email
• Text/SMS
• In-app notifications in your vendor portal or invoice management software

Payment reminders help reduce the frequency of late payments and improve your vendor relationships. As with the invoices themselves, your invoice management software should allow you to customize reminders:

• Personalize the message
• Set the tone of your reminder: friendly, but firm
• Schedule a cadence of reminders: before, on, and after the due date

4. Monitor invoice status and follow up promptly

Once you’ve sent your invoice, it’s essential to monitor the status and follow up as needed. Here’s how to track invoices:

• By invoice number: Assign a pattern of unique invoice numbers so you can easily reference and retrieve them
• By due date: Know when you send invoices and when payment is due
• By payment status: Keep an active status report of invoices with categories such as Sent, Paid, and Overdue

Following up with clients and vendors when payment is due or overdue can be awkward, but it doesn’t have to be. Use these tips:

1. Start with a polite reminder shortly after the due date
2. Always use a friendly tone, but remain firm about the need for payment
3. Resend the original invoice in case the customer has misplaced it
4. Offer flexible payment options to help encourage payment
5. If all else fails, call or email your contact to see how to correct the situation

Another way to keep track of your invoices is by utilizing dashboards or reporting features within your invoice management software for real-time visibility of their statuses. These tools allow you to filter different categories and create regular reports to understand what's overdue, by how long, and whether you’ve heard from vendors about payment.

5. Keep accurate records and analyze trends

In the end, tracking invoices isn’t just about collecting payment. It’s about keeping an organized digital record for your broader financial management and reporting. An centralized digital record of your invoices helps:

• Avoid payment disputes
• Simplify tax records
• Prepare for potential audits
• Track customer trends and predict potential risks

Modern invoice management software comes with reporting tools that can help your accounts receivable team:

• Spot late payment trends by customer
• Forecast cash flow
• Track unpaid and overdue invoices by month
• Understand your average days sales outstanding (DSO)

The best way to improve your processes is to set up a monthly or quarterly review, allowing you to watch out for recurring problems and figure out whether your invoice templates or payment terms need updating.

Why setting up an invoice tracking system is essential

Keeping track of incoming invoices isn’t just about staying organized—it’s about optimizing your accounts payable process and unlocking key business benefits. Here’s how the right invoice tracking system can make a difference:

• Improves cash flow: Invoice tracking provides visibility into your cash flow, enabling you to plan payments strategically and avoid cash crunches
• Avoids missed payments: Missing even one invoice deadline can result in costly penalties, and tracking invoices ensures nothing slips through the cracks
• Strengthens vendor/client relationships: Paying on time builds goodwill with your suppliers, opening the door to perks such as priority service, bulk discounts, or waived rush fees
• Make smarter decisions: Real-time data on unpaid invoices reveals spending patterns to help you spot inefficiencies and negotiate better vendor terms
• Simplifies audits and tax prep: Using an invoice tracker pays off during tax season by keeping records accessible, so you can quickly trace expenses back to their source

Select a system that minimizes manual work and aligns with your business’s needs to maximize the benefits. The risks of not having the right system include late fees, lost invoices, and strained relationships.

Must-have features when choosing invoice tracking software

The best invoice automation software can handle invoice capture and data entry, improve accuracy, and provide critical insights with minimal manual input. Here are the must-have features to prioritize:

• Payment reminders and alerts with customizable timing and messages
• Integration with accounting or payment platforms such as QuickBooks or ERP systems
• Customizable invoice templates so you can add your branding and reuse them across clients
• Real-time status tracking with filters and categorization
• Reporting and analytics to track trends and spot risks
• Mobile access for teams on the go to receive notifications instantly

Based on your business size, these are features to prioritize:

• Freelancers: Look for ease of use, mobile access, automated reminders, and invoice templates
• Small businesses: Custom templates and workflows, accounting integrations, and automated dashboards are most beneficial
• Larger enterprises: Prioritize features that help you scale your business operations, such as advanced analytics reporting, workflow automation, and customizable user roles

Integrating invoice tracking with other financial tools

Integrate invoice tracking with your other financial tools to ensure you see the whole financial picture. Connecting your accounting, payment, and time-tracking platforms streamlines your process by providing:

• Automated data synchronization
• Quicker payment processing
• Optimized financial management

Common integrations to consider include tools such as Ramp, QuickBooks, Xero, Harvest, and Stripe.

The benefits of having all of your financial data in one place include:

• Better cash flow management
• Time savings
• Fewer errors, duplicate invoices, and disputes
• Enhanced reporting, analytics, and tracking
• Improved collaboration across finance, sales, and project teams

Why Ramp Bill Pay is the best way to manage invoices

Ramp Bill Pay is an autonomous AP platform powered by four AI agents that handle invoice coding, fraud detection, approval summaries, and card-based payments without manual intervention. With 99% accurate OCR and intelligent line-item capture, Ramp delivers touchless invoice processing that's 2.4x faster than legacy software¹.

Whether you need a standalone invoice automation solution or a unified platform that connects bill pay with corporate cards, expenses, and procurement, Ramp Bill Pay adapts to how your business operates. Companies using Ramp report up to 95% improvement in financial visibility².

Most accounts payable teams hit the same bottlenecks: approvals that stall invoice processing, purchase orders that don't match, and manual data entry into ERP systems that creates errors and delays.

Ramp resolves each with autonomous, touchless automation:

• Four autonomous AI agents: Handle invoice coding, fraud detection, approval summaries, and card-based vendor payments automatically
• Intelligent invoice capture: Pulls data from every line item at 99% OCR accuracy, removing the need for manual data entry
• Automated PO matching: Checks invoices against purchase orders using 2-way and 3-way matching to flag overbilling before payment goes out
• Custom approval workflows: Create multi-level approval chains with role-based routing that fits your organization's structure
• Approval orchestration: Streamlines the review process with fewer clicks, better visibility, and faster turnaround
• Roles and permissions: Set granular user controls to enforce separation of duties across your team
• Real-time invoice tracking: Follow every invoice from the moment it's received through final payment
• Flexible payment methods: Pay vendors by ACH, corporate card, check, or wire transfer
• International payments: Send wire transfers to vendors in 185+ countries
• Batch payments: Process multiple invoices and vendor payments in a single batch
• Recurring bills: Set up automated payments for regular invoices using templates
• Vendor onboarding: Collect W-9s, verify TINs, and track 1099 data without leaving the platform
• Vendor Portal: Give vendors a secure way to update payment details, check payment status, and communicate with your AP team
• Real-time ERP sync: Connect bidirectionally with NetSuite, QuickBooks, Xero, Sage Intacct, and other major ERPs for audit-ready records
• AI-assisted GL coding: Map transactions to the correct accounts using intelligent recommendations based on historical patterns
• Reconciliation: Match transactions automatically to close books faster

Why make the switch to Ramp?

Ramp sets a new standard for touchless, accurate, and fast invoice processing. Use it as a dedicated AP solution or connect it with Ramp's corporate cards, expense management, and procurement tools for complete financial visibility.

And don't just take our word for it—Ramp ranks as the easiest AP software to use on G2, backed by over 2,100 verified reviews and a 4.8 out of 5 star rating. Finance teams choose Ramp to eliminate manual work, catch errors before they become costly, and close books faster.

Getting started is easy: Ramp's free tier includes core AP automation, with advanced features available on Ramp Plus for $15 per user per month. Enterprise pricing is available upon request.

Invoice processing shouldn't require manual work. Ramp automates it. Learn more about Ramp's invoice management software.

1. Based on Ramp’s customer survey collected in May’25

2. Based on Ramp's customer survey collected in May’25