What is invoice-to-pay? How to automate the I2P process

You’ve just received an invoice from a supplier requesting payment. It seems simple enough—review, approve, and pay. But without a streamlined process, managing invoices can quickly become a headache. Minor delays can strain supplier relationships and disrupt your workflow.

That’s where invoice-to-pay (I2P) shines. Businesses can automate the payable process to handle supplier requests smoothly and eliminate errors. In this guide, we’ll explore how I2P works, why it matters, and how automation can transform how you manage payments.

What is invoice-to-pay (I2P)?

I2P plays a crucial role in accounts payable (AP) and the procure-to-pay process. It ensures suppliers receive the correct payment on time while giving businesses clear visibility into their spending.

A well-managed I2P process supports better decision-making, strengthens supplier relationships, and helps avoid late payment penalties—all of which help with better cash flow management.

The invoice-to-pay process step-by-step

The I2P process helps businesses manage supplier invoices efficiently, from receipt to payment. Here’s how it works, step-by-step:

Step 1: Supplier sends an invoice

Let’s say your company orders office furniture, like chairs and desks, from a supplier. After delivery, the supplier emails an e-invoice to your AP department. It should include key invoice data such as:

• Items delivered
• Total cost
• Accepted payment methods
• The payment due date

Step 2: Enter the invoice into the system

Once the AP department receives the invoice, they put it into the accounting system. If your team uses software, this could involve scanning a paper invoice or uploading a digital version. The system then assigns a unique billing code to track the invoice.

For example, the office furniture invoice might be labeled INV-2025-001, making it visible throughout the payment process.

Step 3: Invoice is sent for approval or matched to a purchase order

The next step is to validate and approve the invoice. Payment approval typically involves matching it with the corresponding purchase order (PO) to confirm accurate details. A smooth approval process helps avoid delays and keeps the processing cycle efficient.

In our office furniture example, the AP team checks that the supplier’s invoice matches the PO for 20 chairs and 10 desks. If everything lines up, the invoice is approved and moves to the next stage of the process.

Step 4: Invoice approval and payment scheduling

After the invoice is confirmed as accurate, it’s approved in the system, and the payment is scheduled—usually based on the due date listed on the invoice. Modern accounting systems often automate this process, syncing payments directly with the company’s bank account so suppliers receive timely payment.

For instance, if the supplier specifies payment within 30 days, the system automatically schedules the payment to meet that deadline. The invoice-to-pay process doesn’t end with payment. For accurate financial reporting, every transaction must be recorded in the company’s general ledger.

Best practices for optimizing your invoice-to-pay process

Sometimes, chasing down invoices takes more time than it should. But a few simple tweaks can turn a clunky process into a stress-free system.

From automating approvals to setting clear guidelines, these tips will help you take the hassle out of managing invoices:

• Switch to electronic invoices: E-invoices eliminate paper-based errors and speed up the processing cycle for more timely payments.
• Automate invoice matching: Use software to match invoices with purchase orders and delivery receipts automatically. Removing manual processes reduces errors and saves your accounts payable team valuable time.
• Standardize invoice submission guidelines: Give suppliers clear instructions on how to submit invoices. Specify required details like accepted formats, mandatory fields, and submission methods (e.g., email).
• Implement approval workflows: Set up approval hierarchies in your accounting software to route invoices to the right stakeholders. Next, enable remote access and alerts to prevent bottlenecks and keep payments moving.
• Track key metrics regularly: Monitor numbers like invoice approval time, payment cycle length, and error rates. Periodically reviewing these KPIs helps identify inefficiencies and take advantage of early payment opportunities when possible.

How to automate the invoice-to-pay process

Automating the I2P process can turn a tedious workflow into a well-oiled machine. From capturing invoices instantly to spotting bottlenecks before they cause delays, here’s how automation can improve your process:

• Instant invoice capture: Tools like Ramp scan and digitize invoices. Next, they extract key details like pricing and payment details for faster processing.
• Effortless routing: AP automation sends invoices to the right people based on your custom approval workflow.
• Real-time insights: Platforms such as Ramp share live updates on approvals and payment schedules so teams can make informed decisions.
• Faster payments: Automation links invoices to your bank account, ensuring suppliers receive payment on time and without mistakes.
• Problem spotting: Automation highlights delays or bottlenecks, allowing businesses to resolve issues before they slow things down.

Benefits of I2P automation

Imagine knowing exactly where every invoice stands, eliminating bottlenecks, and cutting out costly mistakes. That’s what I2P automation brings to the table.

• Improved control and visibility: See who’s handling each step, when actions are taken, and how payments are processed—all in real-time.
• Faster approvals: Predefined workflows route invoices quickly, slash delays, and keep things on schedule.
• Fewer errors: OCR technology and automated matching ensure accurate provider payments, reducing disputes and time-consuming reworks.
• Cost savings: With quicker processing and fewer mistakes, you’ll save time, money, and plenty of headaches.

Case study: How Ramp helped Quora improve bill processing

Quora's finance team faced challenges with a fragmented expense management and bill pay system, which led to inefficiencies and a time-consuming manual workload.

Implementing Ramp’s AP automation streamlined their invoice receipt, validation, and payment workflow through:

• Automated invoice capture and routing: Ramp streamlined the bill processing workflow by automating the capture and routing of invoices to designated approvers. This automation reduced the time required for bill processing from 5-8 minutes to just 1-2 minutes per invoice, enhancing overall efficiency.
• Integration with NetSuite: Ramp's two-way sync with NetSuite minimized manual data entry and errors. The team had real-time visibility into any changes and reduced the number of duplicate entries.
• Enhanced visibility and control: Real-time insights gave Quora’s finance team better control and transparency over invoices' entire lifecycle.
• Time savings and strategic focus: By automating manual tasks, Ramp freed up significant time for the finance team. The team shifted their focus from routine processing to more strategic tasks.

Overall, Ramp's AP automation gave Quora a faster, easier-to-use invoice processing system. It also fits their need for a scalable solution that a small team could manage.

Save time and simplify your invoice-to-pay process with Ramp

Managing the invoice-to-pay process doesn’t have to be tedious or complex. Ramp’s intelligent invoice automation software simplifies every step, from invoice capture to final payment, giving your team more time to focus on strategic initiatives.

With Ramp, you can:

• Effortlessly process invoices: Leverage OCR technology to capture complex invoices and line items in seconds, ensuring accurate data entry with custom rules and smart coding suggestions.
• Seamlessly integrate with your ERP: Sync bills, vendor details, purchase orders, and more in real-time, keeping your systems aligned and up to date.
• Build advanced approval workflows: Customize multi-layered workflows with intelligent routing to ensure invoices are reviewed and approved by the right people at the right time.

Ramp’s innovative platform helps you save time, minimize errors, and improve vendor relationships—all while maintaining full control of your invoice-to-pay process.

Ready to transform how your business handles invoices? Try Ramp's invoice management software.