Manually accounting for outgoing costs is naturally a very time-consuming and somewhat labor-intensive process for team members. Regardless, invoice approval best practices involve timely approval and on-time outgoing payments in order to ensure that operations can continue smoothly. Late and missed payments, on top of potentially creating extra expenses, can undermine the faith of suppliers and the reputation of the company and create unnecessary debts in the balance sheet. On top of potentially interrupting operations, these kinds of problems can adversely affect revenue in both the short and long term. On the other hand, improperly organized accounts payable records can lead to double payments, which can rack up serious costs for the business.
One of the most effective invoice approval solutions is finding suitable software that can help automate approval workflow, save time and labor, and cut down expenses associated with late payments. Invoice approval software can also help with organization and ensure that you’re always on top of outgoing payments. Invoice approval software can be set up using custom parameters to effectively and automatically approve the correct invoices for smooth operations. It can also help track payments made as well as ongoing new payments, and it can be accessed from multiple locations, unlike paper sheets, which must be copied and be physically present.
Invoice Approval Workflow
Depending on what software you’re using (if you’re using software) or what your paper system looks like, invoice approval workflows might look a little different. There are a lot of different accounts payable software systems in use, and each company likely has its own system, including criteria for approval, how incoming invoices are tracked, and how invoice approval data is organized. While many accounts payable software suites are comparable and in common use, they will have unique workflow setups.
For instance, Oracle and SAP are both commonly used in accounts payable, but the process of setting up an invoice approval workflow in Oracle Payables R12 might look different than that of setting up an invoice approval workflow in SAP. They’ll both look a little different than setting up an invoice approval workflow QuickBooks. Workflows will generally include steps from collecting invoice data to making payments, with verification and approval between, but each company will have distinct rules and each software distinct steps to create a functional workflow. Most software will include templates for creating workflows, but you’ll need to ensure that your workflow is sufficiently viable and compliant with your company’s own operating procedures.
Invoice Approval Email Template
Invoices will need to be approved by relevant parties before payments can be made. In order to seek approval, a common procedure is to send an email seeking review and approval so that payments can be posted. Though this task is vitally important to operations, it can become quite labor intensive and time consuming. Relevant parties must be kept in the loop and must sign off on invoices, and since people may take a certain amount of time to reply, the amount of time the process takes can end up compounding. This is another task that can be streamlined with invoice approval automation.
Software can be set up to automatically keep all relevant parties in the loop, so you won’t need to worry about creating an invoice approval email template and sending invoice approval request emails out over and over again—or worry about sending subsequent follow-up approval emails. With a sufficiently intuitive software user interface, you also won’t need to worry about relevant parties wondering how to reply approval emails. With accounts payable automation, you can also avoid using a purchase order approval email template, and instead have a comprehensive system where all relevant parties are in the loop at all times.
Invoice Approval System
An invoice processing procedure involves several important steps, and one of the most important is that of invoice approval. With a sufficiently intuitive and robust invoice approval system, the crucial process of having invoices approved before payment can be made much faster and easier for accounts payable teams.
Different software suites will offer different methods for invoice approvals, sometimes even including automated invoice approval requests. Since invoices can require the approval of multiple parties—each of them having their own schedules—having a robust system that includes automatic approval requests can save a lot of time for everyone involved. Using an invoice approval app that features approval request automation is an effective way to not only save time but save team members the frustration of making sure that each relevant party is in the loop and has reviewed and approved invoices in a timely manner.
Going paperless is a high priority for many teams within many organizations, but having a paperless invoice approval system is a particularly effective use of going digital, as the invoice approval process can be a lengthy one, and having physical sign-offs can be time consuming and expensive. Having a streamlined process involving digital records and approval request automation can save time and money.
Invoice Approval Policy
Each company will likely have its own invoice approval policy. This sets the standard procedure for employees handling invoices and ensures that anyone involved is aware of how to handle invoices and follow standard operating procedures to that end. An invoice approval policy might outline how to ask for invoice approval, from whom invoice approval must be sought, and the invoice review process.
This policy will be important for setting up and maintaining accounts payable and ensuring that each team member knows exactly how to go about getting invoices approved before they can be paid. If you don’t currently have an invoice approval in place, this can lead to confusion and headaches for the accounts payable team. You can develop one starting with an invoice approval policy template and modifying it to suit your operating procedures and your company’s specific needs.
If you use an invoicing policy template, be sure to carefully review the template, as well as any changes that you make to it, before finalizing and sending off the policy. This policy will set standards for gaining invoice approval, so if you’re using accounts payable software and automating the process of gaining approval on invoices, this policy will also inform how you set up your workflows and automation.
Invoice Approval Process Flowchart
The steps in your invoice approval process can be illustrated on a flowchart. The flowchart serves as a visual representation of accounts payable process steps. Flowcharts can be made for almost any steps in the billing and invoicing process. An invoice approval process flowchart can help accounts receivable teams and other team members understand the process visually so that they can quickly determine what the next step is as outlined by your invoice approval policy.
You can incorporate workflows in your invoice approval software that are informed by a flowchart that you’ve created for your invoice approval process. This can be particularly useful when you’re setting up automation and workflows in almost any accounts payable software. It will help you quickly determine which steps can transition to digital workflows or automation.
Flowcharts outlining the process of invoice approval aren’t only helpful to team members who are unfamiliar with the process, though; they also act as a guideline for quick reference, even for team members quite familiar with the process, and serve as a visual aid if they need to explain the process quickly.
Best Invoice Approval Software
Finding the best invoice approval software is a matter of determining your company’s specific needs and making sure they align with available software capabilities to ensure that the software you choose is optimal. Some factors will be important for nearly any business, though.
You’ll want to consider how intuitive the software’s user interface is, whether or not it’s accessible via the cloud, if it will work with your existing accounting tools, and if it offers customizable workflows that will fit in with your existing invoice approval process. You’ll also want to consider what type of automation the software offers, if any.
Software that can automate the invoice approval process will not just save you time and energy; automated invoice processing software will also reduce your chances of experiencing critical errors during any step of the invoice approval process.
Robust payment approval software will also make it easier for relevant parties to quickly review and approve invoices so that they can be passed on to the next party for approval or payment. Finding the right accounts payable approval workflow software will also help keep your balance sheet organized and payments made in a timely manner.