The 9-state invoice lifecycle

Most systems model an invoice as paid or unpaid. That is two states for a process that routinely has nine, and the missing seven are where cash goes quiet.

The nine

• Draft, generated, awaiting approval
• Open, sent, within terms
• Overdue, past due, in sequence
• Disputed, the customer has raised a question
• Partially paid, some cash landed, the balance did not
• Paid, settled and matched
• Void, cancelled before it was owed
• Written off, a decision, not an accident
• Uncollectible, pending write-off, still being pursued

Disputed is the state most systems collapse into "overdue", and it is the one that needs a person soonest.

Modelling the states separately is what lets the follow-up be correct. You do not dun a disputed invoice; you route it. You do not treat partially paid as unpaid; you chase the remainder with the right number in the email.