What is the invoice approval workflow and process?

You have to pay your partners on time if you want your business to succeed. Learn about the invoice approval workflow and how to optimize it.

You’ve purchased a service or product from a vendor for a project, and all the work has been successfully completed. Now, it’s time to pay your providers what’s due. But you might wonder how to process the invoices you receive, especially if you’re new to running a business.

What you need to do is familiarize yourself with the invoice approval workflow. Let’s explore what that is and how you can optimize it for your business.

What is the invoice approval process?

When it comes to making sure that your company pays its bills accurately and on time, you’ll have a solid invoice approval process to thank. These workflows are designed to ensure that all invoices are reviewed and approved by a finance team and that the expenses are tracked as hard costs to allow the release of payment.

The approval process itself is the act of evaluating each invoice that comes in to confirm that the request for payment is legitimate and corresponds with a received or agreed-upon product or service. Once the invoice is approved by the responsible parties, typically including the person who placed the initial order, the invoice is passed on to the accounting team for processing and payment.

The benefits of an invoice approval process.

Incorporating an official invoice approval process into corporate purchasing workflows offers a number of benefits to companies looking to ensure proper spending and expense management. Here are just a few:

1. Faster access to services. Establishing a way to approve expenditures can mean quicker authorization and access to products and services teams need to perform their jobs effectively.
2. More accurate financial records. Expediting invoice approval also helps the company gain a clearer picture of funds going into and out of its capital reserves.
3. Clearer vendor expectations. Rather than waiting for protracted approvals, vendors can receive their payment for services rendered in a timely fashion, helping to establish better expectations and relationships along the way.

Steps for an invoice approval workflow.

The invoice approval workflow is a checklist of the steps you need to take to validate and pay an invoice. The process includes verifying the information and getting the necessary approvals, like knowing whether or not invoices need to be signed, before finally submitting the payment. In the end, each invoice will be cleared, and the money will be sent to the proper parties.

The full workflow is different from business to business. In general, it includes at least the following steps:

1. Verify the invoice by comparing all the information against receipts, progress reports, and other documents.
2. Request further information and clarification if you find any discrepancies.
3. Request the proper signatures to approve the invoice (unless you run a one-person business).
4. Process the payment and issue the money that is owed.

Benefits of automating aspects of invoice approval workflow.

Invoice approval processes can become unwieldy in high-volume situations where a number of different departments and teams are waiting for consent and payment to move forward with operations. This is where automation can come in to save the day.

Automating portions of the invoice approval workflow can help expedite processing and streamline the completion of rote tasks that would otherwise slow down or consume precious time for human resources. Instead, automation platforms can take care of several aspects of the process, helping to make life easier for everyone involved.

Areas where automation can play a large role include:

• Manual data entry. Using automation can pull data into an electronic system, helping to update records with little to no manual data entry required by staff.
• Review routing. When approvals are needed from other team members, an automated system can route the invoices for review to the right individuals.
• Electronic signatures. For invoices that require signed approval, systems can automatically request, collect, and record electronic signatures.

How can I make invoice approval easier?

The more business you get, the more complicated it gets to keep track of your invoice approvals. Thankfully, there are software applications that can help streamline these efforts and make them scalable for businesses of any size.

Consider these additional tips to make your approval processes easier to implement:

• Develop a software-based system to streamline the workflow.
• Switch to digital processing to save money and the environment.
• Use templates that make invoice and payment generation simple.
• Automate approval processes to expedite review and payment.
• Leverage e-sign tools that capture required approvals with better tracking.

Adobe Acrobat makes it easy for you to stay on top of your invoices. It integrates with the most popular business software and lets you request digital signatures for invoice approval. You can keep track of sent documents and verify their status at any time.

Discover how Acrobat can smooth out your invoice approval workflow.