10 advantages of invoice approval automation
The entire invoice approval workflow is, by default, a manual process. All the verification, corrections, filing, approvals, and payments are handled by different employees. It is a complex network of paperwork and spreadsheets. Unfortunately, the more the people and data entries involved, the higher the chance of mistakes and delays.
The automated invoice approval workflow is a digital means of handling this entire process. An expense management platform, like Volopay, allows you to add policies, approvers, and budgets to the workflow. With that, you can automatically decline incorrect invoices, set up payments in advance, and dramatically reduce approval time with a one-click option.
When an invoice is sent to a buyer, the finance department has to ensure that it is a valid invoice. This means checking for due amounts, correct order details, inclusions of any discounts or previous instalments, tax details, etc. Once all of these are verified, the invoice is valid for processing.
An invoice exception happens when the invoice has incorrect or missing information. Instead of forwarding for approval, it is sent to the relevant employee (or back to the vendor) for any corrections or re-issuing.
The invoice management process is dependent upon the company’s policies and may include multiple levels of approval. This personnel is a mix of the finance team, managers, and employees of departments that ordered from the vendor. Sometimes high amounts may require C-suite level approvals.
Once all verification and approvals have been completed, the invoice amount is paid and transaction details are filed for accounting.
Validation is, usually, the process that requires most manual labor in the invoice approval workflow. Invoice approval automation lets validation be consolidated on a single software. An automated invoice can be compared to orders, and any errors can be caught with the help of both AI or quicker intervention. Since most automated expense systems can be integrated with accounting software, the database cross-check by the algorithm is more fool-proof than any kind of manual effort. Moreover, digital error correction or reissuing of invoices is much faster than a paper-based exchange.
Setting up an approval chain in advance lets companies dictate what the approval flow should look like before invoices start piling up. Once an invoice is correctly verified and sorted, it automatically falls into the correct approval line. As opposed to manual sorting, which could lead to missing or misdirected invoices, invoice automation lets invoices be digitally sent to the correct department as soon as verification is processed.
Expense management software makes it possible to set up multi-level approvals. These approvals come over email, web applications, or mobile applications. The one-touch approval eliminates significant wait times with automated invoice approval. Adding multiple people to this approver list allows more than one person to be notified about a pending invoice approval. These approvers and account managers can also request additional details on the same platform, consolidating all information related to an invoice in one database. The quicker the approval, the quicker the invoice is processed.
When you have a heap of paper invoices to process, and confusing approval trails, then it is very likely that some invoices can be processed twice. Not only that but they might also be paid in duplicate. If someone should catch such an error, it then snowballs into a long transaction reversal process. The invoice management process doesn’t have to reach such a stage. Invoice automation allows digitized purchase orders to be scanned for date of issuance, and purchase details. Duplicate invoices can be removed from the approval track and flagged early. Not only can the vendor then be notified of the duplicate invoice (to prevent future errors), but there is no double payment that needs to be rectified.
Paperwork is not just a pain to sort and read. It is also extremely easy to lose. Whether it is a lost invoice within a large office or a lost invoice in the mail, the hazard of misplaced invoices is very likely to occur. This digitization brought about an unexpected level of security in how invoices are stored and communicated. Digital copies of purchase orders, invoices, and receipts make it easy to prevent document loss, which can cost valuable time.
As digitization takes over monetary matters, the security of finances has also become a concern for many financial institutions and departments. If budgets and approvals are pre-assigned, then there is a clear picture of where an invoice came from and where the payment went. Moreover, with systems like Volopay aiding the invoice management process, vendor payments can be assigned to virtual cards. These cards can have limited expiry, allowing you to use burner cards for SaaS and vendor payments. It not only protects you from data loss or hacks, but it also prevents any transaction from being linked to your company bank account.
Needless to say, if your invoices are being systematically processed and your suppliers are being paid on time, then your relationship with your vendors improves. Keeping your vendors happy with timely payments and organized data doesn’t just improve their faith in your company. With secure transactions and accounting, your vendor can also be assured of your growth. Companies that invest in invoice approval automation lean towards streamlined scalability, which encourages vendors to stay on top of their game. A happy vendor-buyer relationship is the key to a happy company-consumer relationship.
The digitization of invoices and transactions creates transparency within the employee network. Spend visibility is crucial to encourage healthy spending, but also to make sure no payments are delayed or any credit score harmed. With transactions being recorded on the same platform, every payment is easy to trace back to the person who initiated it. The trail also includes where the approval came from so that all parties involved are aware of processing status or any issues that may crop up. Having spend visibility also makes it easier for the finance department to allocate budgets and approve any requests for a credit increase.
Not all vendor payments are smooth, or direct. They can sometimes involve complex orders, leading to complex invoicing. Invoice approval automation software can reduce the amount of time spent in this procure-to-pay cycle. AI can automatically match invoices with purchase orders, quantities, existing payments, due payments, discounts, departments, and billed items. This makes the verification and approval of invoices much quicker and error-free. Having this kind of information ready on-hand also makes vendor payments timely, which can improve the relationship between supplier and buyer. Some suppliers and platforms, like Volopay, also offer discounts and cashback for timely payments.
Compliance is another part of the accounting process requiring large amounts of data analysis and paperwork. One of the major advantages of invoice approval automation is that a digital trail is much easier for auditing teams to keep track of. Accounting software that integrates with automated invoice approval systems can have all transaction details in one place for assessment. This not only makes accounting time shorter but also eases regulatory compliance processes. Companies can set policies in advance so that any transactions that don’t comply with them will be automatically declined. The transparency of all expenses, and approval flows, also makes compliance easier to manage.
Volopay’s automated invoice management system is a much smoother alternative to manual invoicing. This spend management system allows you to submit invoices on the go. Pre-assigned approvers can then approve them with the click of a button, and finance can fast track all payments to vendors. Recurring payments can be scheduled in advance to avoid monthly hassles.
Volopay also allows cross-border payments, with support extending to 130+ currencies. You can also earn cashback and discounts for early vendor payments. It is an all-around expense management software for all your secure payments, swift or non-swift.
Volopay integrates with Quickbooks, Netsuite, and Xero so that you don’t have to do any manual coding or transfer to your accountants. The possibility of human error is reduced drastically with invoice automation. Delegated approvers can request transaction details for more accurate payment trails.
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Learn about how to avoid invoice processing errors and eliminate inaccuracies with accounts payable automation.
Better relationships with vendors, eliminating errors & saving time, are some of the benefits of streamlining your invoice management process.
Automated invoice approval workflow digitizes the invoices and automates the payments and approvals of invoices for greater efficiency.