How to dramatically improve your invoice approval process
Invoice approval processes: How to improve
In most workplaces around the world, employees strive to do their best and to be as productive as possible. However, even in the age of streamlined workflows and cloud-enabled technology, some processes can kill productivity, instead of helping.
One such process, often guilty of doing just that, is the invoice approval process.
In this post, we’re going to take a quick look at it with regards to accounting and, more specifically, decision control and authorisation.
Is your invoice approval process broken?
The reality is that, today, most invoice approval processes are still paper and email-based. This means that, no matter how innovative your accounting platforms and processes are, there remains the possibility of a critical process bottleneck.
Relying on hard-to-track paper invoices, and bloated, unwieldy email chains makes manually tracking an invoice approval status a nightmare. This can result in the need to chase unresponsive approvers via phone calls, voicemails, and (more) emails – a most unwelcome distraction.
And things get even worse when you factor in geographically distributed companies or remote workplaces. The more complex the approval hierarchy, and the more exemptions you have in your invoice approval process, the lower the likelihood that your finance manager will sign off on important documents on time.
If this sounds familiar, then your invoice approval process is in desperate need of repair.
Here’s how you fix it in two simple steps:
Step one: Identify invoice approval time-wasters
The first step in solving any problem is admitting that there is one. So, to improve your invoice approval process, you need to first pinpoint the major obstacles.
Often, these will look something like this:
- You need to manually orchestrate the approval workflow. All approval related information needs to be collected, and email chains need to be created and run over and over again for each approval thread.
- You need to chase and cajole approvers. A schedule of email notifications needs to be created and maintained. You also need to track approver availability and approval statuses.
- You need to prepare management and audit reports. Multiple email chains need to be surfed through in order to reconstruct the approval decision history, and filter out the required data.
In short, relying on email as the linchpin of your invoice approval process will leave you chasing your tail. It’s costing you too much time, and too much money. It needs to be replaced.
Step two: Introduce a cloud-based invoice approval workflow
Introducing cloud invoice approval workflow technology to replace paper and email-based approvals will be a game changer for your business. But don’t just take our word for it:
“Before we started using a cloud approval workflow app, our invoice approval process involved printing out receipts and handing them over to the responsible managers for their signature, which required a fulltime person to manage that.”
Sebastian McLarin, Financial Controller, Icehouse
If, like Sebastian, you’re fed up of being at the mercy of an inefficient approval process, switching to a cloud-enabled approval workflow is an amazing alternative.
Such apps allow you to setup and run sophisticated approval processes, all while being incredibly easy to use. They enable multi-step and multi-role approvals, handle exceptions in your approval process, define Requester and Approval rights, produce status and audit reports, and much, much more.
Let’s take a look at some of the ways an approval workflow application can help you combat approval-related time-wasting…
1. Process Automation
Most accounting authorisation processes require that several approval decisions are made by people with different authority and authorisation levels, frequently on multiple parallel approval levels.
A cloud invoice approval app will provide an easy-to-set up workflow that allows you to define conditional, parallel, and sequential approval flows depending on the organisational, accounting, and other business rules your organisation has in place.
Once defined, these workflows will run automatically and route approval requests to the designated Approvers, without you having to push the process further via email.
2. Automatic Notifications
Chasing approvers is frustrating and time-consuming. Things are even worse for multiple-entity and/or geographically distributed companies, and if teams operate from remote locations.
A cloud approval app will provide email notifications, making sure all Approvers are notified in a timely manner, and reminded of the requests pending their decision.
There is absolutely no need to keep track of the approval schedule, or physically chase Approvers; the approval workflow app will do that for you!
3. Built-in Exception Handling
For every review and approval process there can be exceptions. Sometimes, for example, approval requests need to be delegated to a different Approver, either because the regular Approver is currently unavailable or a particular approval needs to be performed by someone outside of the usual approval workflow.
A modern cloud approval app will help you handle all of these cases. You can set a Default Approver to make sure no approval request goes unattended, you can delegate the approval decision to another Approver as an exception, and you can redirect the approval request to someone else if the designated Approver is unavailable.
As opposed to email, if handled within a workflow app, exceptions become part of a standard process with full traceability of approval decisions and complete audit readiness.
4. Built-in Reporting
As the owner of the approval process, you need to be constantly aware of the approval progress status, ideally being able to identify process bottlenecks and forecast approval delays.
A cloud approval app captures the step-by-step approval process and provides a detailed history trail for internal review purposes.
Once defined, the reports will assemble all the information you need and present it in a fully configurable and highly intuitive format for management to review.
5. Built-in Audit Logs
Significant approval activities and all related data such as the name of Approver, date of approval, and Approver comments are captured by the approval workflow app.
No time or effort needs to be wasted reconstructing the approval flow history in preparation for audit.
Why implement cloud invoice approval workflows in your firm?
The key benefits gained by switching from paper and email-based approval tracking to one that’s driven by a cloud invoice approval workflow are striking.
1. Higher process efficiency and improved productivity
More transactions are performed in less time. Less effort is spent on clarifications and the search for missing background information. Notifications and reminders prevent delays.
2. Full control and visibility
The approval process is kept on the surface. All financial documents have a clear approval status with no need to refer to email for an approval status check.
3. Ensured compliance and facilitated audits
Approval workflows are configured in exact accordance with regulatory authorisation requirements. Approval history is captured in detail and can be provided in audit-ready form.
4. Enhanced security
Approvers are taken out of the accounting software. Guardrails are provided for approval decisions to make sure all approvals are performed in accordance with the authorisation level.
Forget email; use ApprovalMax for your invoice approval process
ApprovalMax does everything described above, and more. And with seamless Xero and QuickBooks integrations, it can slot in as an important part of your overall accounting workflow.