How To Automate Your Approval Workflow

Discover the significance of the invoice approval workflow in accounts payable. Explore the steps found in manual invoice approval workflows, along with the advantages of automating this essential process.

As companies grow, managing approval workflows becomes increasingly complex. The traditional methods of using email and paper-based systems for approvals are no longer sufficient for businesses that want to stay competitive and prepare for the future. These outdated methods often require input from multiple individuals, involve numerous steps, and require meticulous tracking.

The consequences of delays in invoice processing can include late payments, increased costs, and strained supplier relationships. By implementing a suitable solution, the company can eliminate inefficiencies and experience a range of benefits such as improved accuracy, enhanced speed, and increased financial transparency.

In this blog post, we will explore the benefits of automating your approval workflow. Whether you’re a small business owner, team leader, or part of a larger company, read on to learn how to transform your approval workflow.

What is an Invoice Approval Workflow?

An approval workflow process is a structured sequence of steps that define how a document, request, or task moves through a company for approval. This process typically involves multiple stakeholders who need to review, comment on, and authorize the item before it can progress to the next stage or be finalized. The approval workflow process ensures that decisions are made systematically and organized, with clear accountability and transparency at each step.

Steps in the Invoice Approval Workflow

1. Invoice received

The process of approving invoices starts when a company receives an invoice from a vendor.

2. Validation process and PO matching 

The validation process involves verifying the accuracy and completeness of the invoice. PO matching is the process of comparing the invoice to the corresponding purchase order and goods receipt note.

3. Discrepancies or exceptions

Discrepancies and exceptions can lead to delays and challenges in the payment process. These issues may range from pricing discrepancies to missing information like a PO number. By promptly addressing and resolving these exceptions, companies can maintain the accuracy and integrity of their financial processes.

4. Approval routing and approval workflow

Once invoices are validated and matched, they are routed to the individual based on the information mentioned in one of the purchasing documents for approval. The invoice goes through an approval process, which can be done manually with signatures or automated using a system that sends the invoice electronically to the right approvers. Different teams from various departments, not just finance, might be involved in the approval process.

5. Payment processing and Bookkeeping

The approved invoice is sent for accounts payable processing to initiate payment to the vendor. Subsequently, the transaction needs to be properly recorded and documented in the accounting system.

Automated Invoice Matching in Flowis

When the system identifies 1-way invoice matching:

Through the creation of a one-way list, Flowis can automatically direct verified invoices to the relevant individual for appropriate action. This person can access the invoice on their personalized Action list, showing only transactions requiring their attention.

When the system identifies 2-way or 3-way invoice matching:

When Flowis completes verification and checks on the invoice and all relevant documents, the invoice will be automatically approved and entered into the ERP system. Throughout this process, no one needs to intervene.

What if an invoice successfully goes through validation and checks, but the system detects that a necessary document is missing? The transaction will be automatically routed to the appropriate person to create one.  

Alternatively, a logic or condition can be implemented where the system puts the invoice on hold for 5 days if a receipt is missing. Flowis system checks every day to see if the receipt has been created. If not, it will be automatically routed to the appropriate individual. If there is still no action taken, reminders will be sent. Once the receipt is created, the system will perform checks again. If every check passes, the invoice will be automatically approved and recorded in the ERP system, without any involvement from the Accounts Payable team.  

How Does Flowis Automation Improve the Invoice Approval Workflow?

Automation provides several benefits to companies of all sizes:

1. Increased efficiency 

With Flowis, companies can automate their invoice approval process, eliminating the need for manual approval and saving time and resources. When invoices meet pre-defined criteria, they are automatically approved, reducing the workload for accounts payable teams, and streamlining the entire process. 

2. Cost-effective 

Auto-routing and auto-approvals save time and reduce the need for manual labor. It can significantly reduce the overall cost of the invoicing process and labor costs. 

3. Variances and thresholds 

With Flowis, companies can set up variances and thresholds for invoices. These thresholds can be based on a percentage (difference up to 5%) or a certain amount (up to 100 USD). When invoices meet the thresholds, they are automatically approved. It reduces the need for manual intervention and ensures that invoices are processed accurately and in compliance with policies and procedures. 

4. Complex approval rules 

The approval matrix in Flowis allows companies to create complex approval rules based on their specific needs. It means that companies can set up multiple levels of approval, define different approval thresholds for different departments or individuals, and more. 

5. Customizable invoice checks 

Flowis allows companies to define their invoice checks based on their specific needs and requirements. It means that companies can create checks that are tailored to their unique workflows and processes, ensuring that invoices are approved only when they meet specific criteria. 

6. Generate purchase orders and goods receipts in Flowis 

The system enables users to generate purchase orders and goods receipts within the same platform, without the need for any other system.  

7. Automated recording in ERP system 

Once an invoice is automatically approved, it is automatically recorded in the ERP system. It eliminates the need for manual data entry and reduces the risk of errors. 

Flowis empowers companies to automate their processes like approval workflow effectively, also optimize efficiency, and drive sustainable growth. Its user-friendly interface and adaptability make it a suitable solution for companies looking to streamline their operations and improve productivity. 

Simply click the “Talk to Us” button located in the upper right corner and we will show you more about how to automate your approval workflow.

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