Glossary

Invoice-to-Pay

An invoice-to-pay is the first step of the purchase-to-pay processing cycle.

How to process an invoice to pay

As soon as a seller sends an invoice payment to the accounting department, they check it, register it inside the ERP system, assign a billing code to the invoice-to-pay and forward it for approval. Next, they assign the date of the invoice execution to ensure that the recipient gets it before the due date. 

However, to better understand this process, we need to explore what an invoice payment is.

What’s an invoice payment and what it’s used for?

First, an invoice, in its turn, is a document that itemizes and signifies a transaction following the purchase of goods and services between a buyer and a supplier. Meanwhile, an invoice payment is a transaction from the buyer’s to the seller’s account in terms of a given purchase.

An invoice payment process

Official sources report that there are no restrictions on how long the invoice payment process should take. However, specialists insist that merchants provide the customers with a reasonable time to pay for goods and services. 

In the meantime, it takes less than a single business day to process the invoice for payment inside the invoice payment system. 

Invoice payment terms

CIA – cash in advance. Requires the buyer to pay for the goods or services in cash before the work begins or the goods are delivered.
PIA – payment in advance. Requires the buyer to pay full price for the goods or services upfront.

50 Percent Upfront. Requires the buyer to pay 50% of the total price before the work begins or the goods are delivered.

15 MFI – Month Following Invoice. Requires the buyer to pay on the 15th of the month following the invoice.

EOM – end of month. Requires the buyer to pay by the end of the month in which he received the invoice.

And last but not least,  NEt 7 (21, 30). Requires the buyer to pay within 7 (21, 30) days after the invoice arrives.

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