Hi Guys, I have Vendor Payments Approval workflow, not sure why the Bill shows a status of Fully Paid when the vendor payment is not yet approved.

Sounds like workflow didnt trigger, perhaps. Can you check the WF log to see if it did ?

It also happens when there is a prepayment waiting for the bill. If that is the case, your bill should be auto-paid due to application of prepayment. Check related records of the bill as well as PO to find it out