Create an efficient automated invoice approval workflow?

Have you struggled with creating a workflow that will make invoicing a breeze? With a good invoice approval workflow, you can ensure that the workflow is faster, more accurate, and more efficient.

What is invoice approval workflow?

Invoice approval workflow in accounts payable involves a set of actions that must be followed for the invoice to be cleared. It serves as a checklist to guarantee that the invoice is valid, there are no errors or discrepancies, and that the invoice is paid quickly. An invoice approval process entails evaluating and approving invoices before payment processing.

A typical invoices approval process begins when the company gets an invoice from the vendor, which goes into the verification process. It is then sent for approval to the person purchasing that goods or services. The invoice is subsequently forwarded to the accounting department after the details have been verified. From there, the payment is processed.

Invoice management

What is invoice approval automation?

Paper and the manual-based process slow down the invoice approval workflow. Hence, here invoice approval automation comes into the picture. Approval process automation is a complete account payable automation solution for the manual approval workflow. It connects with existing accounting systems, allowing both PO and invoices to be approved more quickly. It sends bills to review to the selected approver automatically.

 A central dashboard displays all the approved and pending invoices. The invoice is automatically matched with PO (if it contains a PO) and raised for exceptions. Once the invoice is approved, and verification checks are done, it goes into the accounting system for the payments to be processed. Hence, scrapping late fees.

invoice approval workflow

What to consider for invoice approval workflow?

Common mailbox or document repository

A centralized mailbox or document storage is an essential component of an automated invoice approval workflow. Vendors and suppliers can send invoices to a single email address or save the invoice in a centralized invoice document repository. After all of your vendors' bills have arrived in one place, the portal can be configured to route invoices to the proper approver based on the information provided in the invoice, such as product, department, or amount.

Invoice submission criteria

While submitting an invoice, make sure vendors adhere to strict rules when submitting an invoice. All details about the purchase should be mentioned in the invoice, such as the invoice number, PO number, date of purchase, description of the item, number of units, and payment terms. If any important information is missing from an invoice, it may need to be questioned and even returned to the seller, which ultimately delays payment.

Two or three-way matching

It's critical to verify your invoices with purchase orders or other purchase-related documents

An automated 2-way/ 3-way matching ensures that each invoice is compared to the appropriate purchase order and receipt. The accounts payables team checks for data accuracy reduces duplicate payments, takes advantage of early payment discounts, and improves the payment cycle by processing early payments.

Delegate approvers

Set approvers at each stage of the invoice approval process are pretty critical. Without relevant approvers, it will lead to payment delays, which will mean jeopardizing relationships with vendors. Make sure to set a multi-level approval process and identify the person or entity responsible for authorizing at each stage. When an invoice is approved at one level, it is immediately forwarded to the next approver in the chain before being deemed ready for payment, thanks to an automated approval workflow.

Automatic reminders and notifications

The most exciting and beneficial part of automated accounts payables is that once the invoice is routed for approval, assigned approvers will receive an automatic notification or a message from taking action on the invoice. They can approve the invoice via email or by logging into the AP system. This ensures that the invoice approval process is smooth and efficient. If the invoice is not paid immediately, reminders will be sent at predetermined intervals to avoid further delays.

Measure KPIs

Measure parameters through statistical data analysis. It will give you a complete audit trail to help you with Internal audits and investigations.

- Invoice cycle time- From invoice data entry to payment processing.

- Total invoices received vs. invoices processed

- The percentage of invoices is manually entered into the accounting system.

- Days it takes to remedy an invoice problem.

- Cost of processing an invoice.

Why choose Volopay's invoice approval system?

Process and approve invoices in one place

Submit all invoices on the fly, and ensure that they are authorized by department heads and paid on time by finance.

Sync up all of your transactions

Sync all paid invoices to your accounting software and ensure they're associated with the correct vendors with automatic reconciliation.

Early payment discounts

You pick how much money is set aside for early payments, establish your rate of return, and we'll make a dynamic offer to your suppliers based on all of your invoices.

Reduce the stress and inconvenience of late payments

Assign specific vendors to your expenses and automate them all on the move.

Get complete data about your business operations

Have visibility to the entire digital invoice workflow, allowing you to adopt better reporting mechanisms and make more informed strategic decisions.

Fraud exposure

As you can track all the orders and invoices through one platform, it lowers the chances of fraud, ensuring transparency.

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Related pages

Automated invoice approval workflow digitizes the invoices and automates the payments and approvals of invoices for greater efficiency.

Better relationships with vendors, eliminating errors & saving time, are some of the benefits of streamlining your invoice management process.

Increased productivity, data security & saving time, are some of the benefits of automated purchase order matching.