Invoice tracking: How to track invoices in 5 easy steps

Cash flow issues are a leading cause of business failure, with 82% of businesses citing them as the reason they shut down according to a study by U.S. bank. With only 52% of invoices paid on time for small businesses, it’s clear: keeping track of invoices isn’t just about staying organized—it’s about staying in business.

Fortunately, managing and tracking incoming invoices is one of the simplest finance operations to automate. In this post, we’ll cover what invoice tracking is, why it’s critical for your operations, and the best practices for managing invoices with the right tools.

What is invoice tracking?

Invoice tracking is the process of monitoring the status of invoices—whether you’re sending or receiving them. At any point, you should know exactly where an invoice stands in the accounts payable cycle or payment process, from the moment it’s issued to the day it’s paid.

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

What invoice data should you track?

For every vendor invoice in your system—and outgoing invoices as well—you need quick access to key details. A proper tracking system should allow you to easily pull up an invoice and find the following data point on each invoice type:

Why setting up an invoice tracking system is essential for AP efficiency

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

• Avoid late fees: Missing even one invoice deadline can result in costly penalties. Tracking invoices ensures nothing slips through the cracks.
• Strengthens vendor relationships: Paying on time builds goodwill with your suppliers, opening the door to perks like priority service, bulk discounts, or waived rush fees.
• Optimizes cash flow: Invoice tracking gives you visibility into your cash flow to plan payments strategically and avoid cash crunches.
• 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.

To get the most out of these benefits, choosing the right system is key—one that reduces manual work and fits your business’s needs. Manual tracking can be slow and error-prone, while invoice tracking software automates tasks like creating and sending invoices, setting reminders, and of course, tracking invoice payments.

Now, let’s dive into the five best practices for tracking invoices effectively.

5 crucial practices to implement for tracking invoices

If there’s one thing to focus on, it’s these five essential tips to improve how you keep track of invoices. While the process may vary slightly from one business to another, these proven best practices can help any company streamline their approach to tracking invoices.

Step 1: Use invoice management software to automate payments

While Excel spreadsheets for payment tracking might work in a pinch, they can slow you down as your business grows. The easiest and best way to track invoices and payments is with invoice management software that simplifies the process, saving time and reducing errors.

With the right tools and apps, you can:

• Schedule payments: Automate payments to go out on the date of your choice.
• Streamline approvals: Route invoices to managers for sign-off and notify them when action is needed.
• Notify vendors: Keep vendors updated by automatically confirming payment initiation.
• Send payment reminders: Reduce late payments by setting automated reminders for vendors or customers.
• Standardize invoices: Use consistent formats to capture critical details like invoice numbers, amounts, and due dates.

Additionally, the most effective way of managing outstanding invoices is by using automated invoice tracking systems that offer functions like:

• Customizable reports: Generate detailed reports to quickly spot overdue invoices, track payment statuses, and monitor overall accounts receivable health.
• Client portals: Provide clients with a secure online portal to view, manage, and pay invoices directly—improving convenience and payment speed.

The best software automates invoice processing end-to-end—pulling details from incoming invoices, initiating approvals, and tracking payments—so you spend less time on manual work.

Step 2: Create an AP aging report

Regular AP aging reports give you a clear picture of outstanding invoices and upcoming payment deadlines. This helps you manage cash flow effectively and resolve unpaid bills quickly by:

• Spotting payment bottlenecks: Identify patterns like recurring delays or problematic vendors and address them proactively.
• Setting clear payment terms: Include specific due dates, payment methods, and late fees in your invoices to prevent confusion and delays.

To keep cash flow predictable, regularly follow up with clients on overdue invoices. Offering flexible options, like payment plans or online payment methods, can make it easier for clients to settle their balances as well.

Step 3: Stagger your vendor payments

Paying all your bills at once can create cash flow problems, especially if unexpected expenses arise. Instead, stagger payments to keep your cash reserves flexible and healthy.

• Prioritize payments: Schedule critical payments first while spreading out others to avoid cash crunches.
• Offer flexible options: Support multiple payment methods—like ACH, credit cards, or bank transfers—to streamline vendor payments.

Strategic payment scheduling helps you stay agile, manage expenses, and prepare for growth opportunities.

Step 4: Check for duplicate payments

Duplicate payments happen more often than you’d think, but invoice tracking software can flag them before they slip through. Automated tools recognize duplicate invoices, identify suspicious patterns, and help prevent fraud. Make sure to:

• Use unique invoice numbers: Sequential and unique numbering makes tracking easy and prevents duplication.
• Document communications: Keep records of emails, payment confirmations, and receipts to resolve disputes quickly.

By automating these checks, you protect your business and ensure your AP process stays error-free.

Step 5: Control access

Fraud prevention starts with controlling who can access your invoice management system. Modern cloud-based software lets you:

• Set role-based permissions: Limit access based on user roles to ensure only authorized team members can make changes.
• Maintain audit trails: Track who made changes and when to improve accountability.
• Send invoices promptly: Timely invoicing keeps payment cycles moving and strengthens your cash flow.

With the right internal controls and best practices in place, your AP operations stay efficient, transparent, and secure.

Must-have features when choosing an invoice tracking software

The best automated invoice processing system can automate invoice capture, improve accuracy, and provide critical insights. Here are the must-have features to prioritize:

• Ease of use
• Seamless integrations (e.g., accounting software like QuickBooks, ERP systems)
• Automation capabilities (e.g., OCR, automated payments)
• Robust security (e.g., RBAC, MFA, audit trails)
• Real-time reporting
• Scalability

Look for an invoice tracking solution that eliminates arbitrary seat or usage fees—so it can scale up or down as your business evolves.

How Ramp Bill Pay is the best way to boost AP efficiency for every business

Ramp Bill Pay is an AI-driven accounts payable solution designed to address the most common pain points in AP. From automated invoice entry and detailed line-item recognition to seamless payment scheduling and reconciliation, Ramp streamlines invoice processing, routes approvals intelligently, and integrates with your ERP—enabling you to accelerate your financial close without unnecessary manual steps.

Traditional AP tools often struggle with inflexible ERP integrations, inconsistent PO matching, and fragmented workflows. Ramp Bill Pay overcomes these hurdles by delivering comprehensive automation for the entire AP process—fast, adaptable, and precise. It provides full transparency and control from invoice receipt through to payment completion.

Ramp stands out as one of the easiest AP softwares to use based on G2 reviews (as of June 5, 2025). Trusted by 2,000+ reviewers and holding a 4.8/5 star average, teams rely on Ramp to reduce repetitive tasks, prevent costly mistakes, and ensure their financial records are accurate. One customer even described Ramp as the best in the market for AP management and expense workflows.

The challenges that slow down AP teams

Most accounts payable operations run into obstacles at three critical points:

• Reconciling invoice errors manually
• Chasing down delayed approval responses
• Duplicating data entry in accounting platforms

Ramp Bill Pay eliminates these bottlenecks with features designed specifically for AP:

• Bi-directional syncing with ERPs like NetSuite, QuickBooks, and Xero
• Support for ACH, credit card, checks, and both domestic and international wire payments
• Intelligent, customizable approval flows with advanced routing and user permissions
• Comprehensive controls spanning procurement, AP, expenses, and bookkeeping
• Recurring payments, batch bill processing, and vendor tracking tools
• AI-driven invoice capture and suggestions for GL coding
• Automated two-way matching of invoices and purchase orders

Organizations from various sectors have found Ramp to be the top choice for AP software that delivers both simplicity and robust oversight. For example:

• Skin Pharm reduced approval timelines from weeks to just 48 hours, transforming their financial operations.
• Mix Talent switched from BILL to Ramp and now spends only 15 minutes on AP, dramatically increasing productivity.
• Dragonfly Pond Works scaled vendor payments smoothly using Ramp’s bill pay scheduling, supporting their continued growth.

Why make the move to Ramp Bill Pay?

Ramp Bill Pay is an advanced AP software with built-in AI, seamless ERP integrations, and workflow automation that actually works for finance teams. Ramp empowers your business to process invoices faster and with greater accuracy, so you can focus on more strategic work and less on manual tasks.

Never lose track of a vendor invoice payment. Try Ramp's invoice management software.