The accounts payable department should have a quick turnaround time for invoice approvals that is frictionless, efficient, and economical. That is the data-driven, technology-enabled strategy for software solutions. However, the inefficiencies of manual invoice processing may speak to the fact that this isn’t always the case, especially in the AP and Finance departments.
Automating the finance function is becoming more crucial for businesses aiming to enhance vendor relationships and streamline workflow. Instead of carrying papers from desk to desk for approval, as with traditional AP methods, today’s businesses want an AP solution that supports a remote or hybrid procedure. As a result, organizations can greatly enhance their invoice approval workflow by utilizing an AP automation platform, saving time and money, lowering errors, and enabling remote operations.
What is An AP Invoice Approval Process?
A paper-based, manual invoice approval procedure stifles cash flow, puts competitiveness at risk, and negatively affects the bottom line in this digital transformation era. The reason why so many businesses are installing and utilizing invoice approval process automation is to get rid of this expensive inefficiency.
Automating the invoice approval workflow speeds up validation and approvals, reduces manual errors (and critical cash flow) and increases visibility into overall invoicing, accounting data, and spending for the AP department teams and the CFO to improve forecasting and strategic decision-making.
Invoice approval is known as checking incoming invoices to ensure they are accurate and valid before paying them. This often includes seeking clearance from the stakeholders who are most familiar with the case because the AP (accounts payable) team is frequently unaware of each invoice’s facts.
An effective invoice approval reduces the chances of errors or saves from invoice fraud. You must complete the invoice approval process before paying the amount, ideally before it impacts your general ledger (GL).
What Should Be An Ideal Invoice Approval Process
A system of internal controls to stop fraudulent payments is implemented by a business before an invoice may be paid. This process is known as the invoice approval process. It begins when an invoice is received, examined for accuracy, and, in a perfect world, placed through a three-way matching procedure to confirm that it corresponds with the original PO and receiving the report. All dates, amounts, and other information must be precise.
In this day and age of digital transformation, there are far too many businesses whose entire workflow process for invoice approvals is still entangled in email and paper handling. Therefore, this adds a great deal of needless time and distance between an invoice’s entry into the organization, the approvers’ final check, and the invoice approval (or enquiry). Also, bottleneck issues may arise if you deal with a manual invoice approval method.
- Invoice receipt
Utilizing e-invoicing solution technology for invoice receiving eliminates the need for manual data entry with automation, decreasing errors, boosting speed and capacity, and expediting the approval process. It also frees up AP teams to focus on other important duties.
- Three-way match
When the approval process drags, exceptions can be extremely annoying. In addition, purchase orders (PO), receiving reports, and invoices must sync for approvers to confirm invoices for payment. You can achieve this by implementing e-Invoice technology that has three-way match capabilities.
- Automated invoicing vs manual invoicing
As you can see from the themes discussed above, there are clear benefits to switching from manual invoicing to invoice automation software. The advantages from a daily job perspective are clear, but expediting the invoice approvals process so that third parties are paid faster offers strategic benefits in terms of cash flow optimization, managing the supplier relationship, saving cost, and also having other competitive advantages.
Benefits Of Automated Invoice Approval Process
If you use an automated invoice approval process as a component of a larger invoice automation or procurement software solution, an automated invoice approval process offers the following benefits.
- Faster Invoice Processing Time
- Lower Invoice Processing Cost
- Lower Invoice Exception Rate
You can ensure an enhanced bottom-line effect, better use of AP team resources, happier vendors, and streamlined cash flow in the actual world of business.
How Profit Jets Can Help Enhance Your Invoice Approval Workflow
Companies are eager to automate their Accounts Payable workflow, from purchase orders to payments, to change AP and enable departments to operate with fewer processing costs, more insightful data, and more productivity. Profit Jets has a proven track record of customer success with small businesses, mid-market organizations, and sector leaders, so we should know this.