How to Make Your Invoice Approval Process a Breeze
The typical manual invoice approval process can be slow and cumbersome. Some invoices may be paid right away, but others may fall by the wayside due to common problems with the invoice approval process. For example, when there are numerous document touchpoints including physical document preparation, routing, manual data entry, and error correction, it’s easy to miss out on opportunities like early payment discounts.
What’s more, when management is invisible throughout the invoice approval process, others involved may be completely mystified as to the current status of the invoice. A clunky invoice approval process contains many hidden costs, particularly if there are several manual steps involved. Every time an invoice is physically handled before payment is made the risk for an error increases. This contributes to higher labor costs, longer processing cycles, and cash flow irregularities.
But when you automate the invoice approval process, you can enjoy several benefits. For one thing, an automated invoice approval process is easier to scale up without having to add staff members. Manual matching can be made a thing of the past, as can the physical routing of paper documents from desk to desk in pursuit of approval. An automated invoice approval process helps eliminate duplicate payments, can create an automatic audit trail, and can reduce invoice disputes significantly. Here are some ways to make your invoice approval cycle a breeze.
Automate Matching of Invoices, Purchase Orders, and Receipts
When you take the time to automate invoices, purchase orders, and receipt generation, you can speed up the invoice process considerably. Your process can be designed so that each invoice that arrives is matched against the correct purchase order and receipt. When invoices match, they can be quickly routed straight through any necessary approval steps right to your company’s finance system. Manual matching of invoices, purchase orders, and receipts becomes a thing of the past, freeing up staff time for more important tasks.
Automate Invoice Approval Routing
Creating an automated invoice approval process requires that you define the chain of authority for approval and create automatic connections that deliver the right electronic document to the right person at the right time. You can even design different approval paths. Say that invoices for under a certain amount only need the approval of the section manager before finance will arrange payment. You could make it branch out separately from the process for invoices for over that amount, which must be approved by the section manager and the department head before finance will arrange payment.
Create a Paper Trail Without the Paper
Perhaps one of the best advantages of an automated invoice approval process is that it can be set up to automatically create a “paper trail” that provides visibility into every step of the process. Authorized users can see where in the process an invoice is at any given time, and if ever there is a question about whether a step was completed properly, the electronic audit trail can answer it. This can be a tremendous benefit when dealing with things like software license audits. Proof that a license was paid for can be produced instantly, saving all parties time and trouble.
Features to Include in Your Automated Invoice Approval Process
The exact components that make up your automated invoice approval process workflow should be tailored to your company’s needs, so it’s important to choose workflow software that provides sufficient flexibility to customize workflows. Typically, however, automated invoice approval processes include the following features:
- Approval-based routing
- Email approval
- Document upload and download
- Email notifications
- Fetch capability for user information
The invoice approval process is integral to just about every business. It covers multiple departments and purchases of all sizes. Handling invoices correctly is essential to proper accounting and cash flow for your business. But the invoice approval process that works for one business may not work for another. You need the flexibility to customize workflow software for the invoice approval process that is right for your organization.