Invoice payment, also known as accounts payable, is the procedure by which a business pays a vendor for items and/or services it has procured. Let’s understand how do invoices work. Firstly, the vendor sends the bill to the buyer, which includes: description and nature of an item, price, delivery date and other conditions of payment. Secondly, the buyer receives the invoice and verifies the invoice amount and its correctness and ensures that it has been approved as per the approval procedures. Finally, the buyer settles the bill using a method of their choice, and they book the transaction for either bookkeeping or reference.