The accounts payable process is how a business pays suppliers correctly: receive the invoice, match it to the order and receipt, book it with GST and TDS, approve it, pay on the due date and reconcile. When approvals live in email, the same bill arrives twice, gets booked twice, and the second payment surfaces only when the vendor mentions it.
In OneFinOps, the Payables Agent checks every bill for a duplicate and a match before it joins a payment run.
Key takeaways
- Each step in the AP process has a control.
- In India, TDS, GST input tax credit and the MSME 45-day limit sit inside it.
- No one person should create a vendor, book an invoice and release payment.
Accounts payable process steps and flow chart
New to AP? Start with what accounts payable is.
- Vendor onboarding and purchase order. Verify PAN, GSTIN, bank and Udyam; approve the purchase order per limits.
- Goods receipt. Stores or the requester records the quantity accepted.
- Invoice receipt and verification. Log it the day it arrives; check GSTIN, tax, arithmetic and duplicates.
- 3-way matching. Match against PO and GRN; send anything outside tolerance to procurement or stores.
- Booking and approval. Post expense, input GST, vendor liability and TDS payable; approve per the matrix.
- Payment and reconciliation. A second person releases the batch; send remittance advice and reconcile the vendor.
Non-PO invoices such as rent and audit fees skip the order and match, so the budget owner confirms them under tighter limits.
Accounts payable internal controls
Split vendor master changes, invoice booking and payment release between different people. Accept bank detail changes only when verified by calling a known number. Enforce the approval matrix in the system, and keep an audit trail, which the Companies (Accounts) Rules require.
| Checkpoint | Step | Rule (as of September 2026) |
|---|---|---|
| TDS deduction | Booking | At credit or payment, whichever is earlier, under section 393 of the Income-tax Act, 2025 |
| TDS deposit | Month end | By the 7th of the next month; for March, by 30 April (TDS due dates) |
| GST ITC | Booking | Invoice in GSTR-2B, goods or service received; section 16(2) CGST Act |
| MSME payment limit | Payment scheduling | Micro and small suppliers within the agreed period, max 45 days (section 15, MSMED Act) |
Accounts payable KPIs and a DPO example
Track cycle time, first-pass match rate, on-time payment rate, MSME dues past 45 days and days payable outstanding (DPO).
DPO = (Average trade payables ÷ Purchases) × 365. A Chennai manufacturer with average payables of ₹2.8 crore and purchases of ₹22 crore has DPO = (2.8 ÷ 22) × 365 = 46.5 days. Read it alongside the MSME dues report, because an average can hide late MSME invoices. The DSO, DPO and cash conversion cycle calculator works out DPO from your own figures, and the MSME interest calculator prices any invoice that slips past 45 days.
How OneFinOps runs the AP process
The Payables Agent reads each bill into lines, matches it to the order and the receipt, checks for a duplicate and confirms the bank details on the vendor record. It posts the liability, adds the bill to the next payment proposal, and after release sends the remittance advice.
A price or quantity outside tolerance goes to the buyer who raised the order, and the run is released by the person who holds the mandate.
Unlike approvals kept in email, OneFinOps records who approved what, under which limit, as a field on the invoice.
See how the Payables Agent works
