How To Automate Your Approval Workflow

Simplify and automate your approval workflow using Flowis. Improve efficiency, accuracy, and transparency in your AP processes.
approval workflow

As companies grow, managing approval workflow 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 These outdated methods often require input from multiple individuals, involve numerous steps, and require meticulous tracking.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. Approval workflow automation is an area that offers significant potential for optimization in the accounts payable (AP) process. 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. Continue reading to discover the steps for automating your AP approval workflow and how to optimize it.

Understand Your Current Workflow

The first step in automating any process is to understand how it works today. Map out the current approval workflow in your AP system, identifying all the stakeholders involved and the steps each document (invoice, purchase order, etc.) goes through before final approval.

Typical steps might include:

  • Receiving and scanning invoices
  • Matching invoices to purchase orders
  • Routing documents for departmental approvals
  • Approving payment amounts
  • Processing payment and reconciling accounts

Having a clear understanding of your existing workflow will help you pinpoint the pain points, redundancies, or manual tasks that can be automated.

 

Choose the Right Automation Tool

Once you understand your workflow, selecting the right automation software is important. There are many tools on the market, ranging from comprehensive AP automation platforms to individual approval routing software.

Look for an automation tool that:

  • Integrates seamlessly with your current accounting software.
  • Provides customizable approval workflows that can be tailored to your business processes.
  • Offers audit trails to ensure compliance and transparency.
  • Has a user-friendly interface for employees, reducing the learning curve.

One such solution is Flowis, which effectively automates accounts payable processes. 

 

Define Your Approval Hierarchy

Automating your approval workflow requires setting up rules that define who approves what and when. One of the main advantages of automation is that it allows you to structure approvals based on predefined criteria, such as the amount, department, or type of expense.

Common approval hierarchies include:

  • Amount-based approvals: Invoices below a certain amount may not require full department approval, while larger invoices must go through multiple approval levels.
  • Department-based approvals: Set rules so that invoices are routed to the appropriate department head for approval.
  • Role-based approvals: For example, invoices for marketing expenses might need approval from the CMO, while tech-related invoices go to the CTO.

These rules can be configured directly in your AP automation software, ensuring that invoices automatically follow the correct path.

 

Automate Data Entry and Invoice Matching

One of the most time-consuming tasks in the AP workflow is matching invoices to purchase orders (POs) and goods receipts (GRs). Automating this step can save a significant amount of time and reduce errors.

With automation, invoices can be scanned and data extracted using Optical Character Recognition (OCR) technology. This automation significantly reduces manual data entry errors, speeds up the process, and ensures accuracy.

Let’s break down how automation enhances each type of matching:

One-Way Matching

The system compares invoice details (e.g., price, quantity) with the corresponding purchase order. If there are discrepancies, Flowis automatically flags the invoice and routes it to the relevant person for review, displaying it on their personalized action list.

Two-Way Matching

Two-way matching adds an additional layer by comparing the invoice against both the PO and the goods receipt. This ensures that not only was the order placed, but the goods or services were also delivered as expected. Flowis automatically approves the invoice and enters it into the ERP system once verified. If documents are missing, it routes the invoice for resolution or holds it until all requirements are met.

Three-Way Matching

Three-way matching adds the final layer of verification by comparing the invoice with the PO, goods receipt, and contract terms (such as payment terms, agreed prices, and discounts). This level of matching is typically used for complex transactions and larger contracts. Flowis automatically checks all details and, if everything matches, approves and records the invoice in the ERP system. If discrepancies are found, the system routes the invoice for review and ensures all checks are passed before final approval.

action list for approval workflow

 

Implement Approval Notifications and Alerts

In a traditional AP approval workflow, delays often occur because approvers are unaware that they need to take action. Automation can help address this issue by sending automatic reminders and notifications to approvers.

For example:

  • When an invoice is ready for approval, Flowis can automatically send a notification to the designated approver.
  • If an approver delays their response, Flowis can send follow-up reminders to ensure timely action.
  • Alerts can also be set up to notify stakeholders when invoices are approaching due dates, preventing late payments and potential late fees.

These automated reminders ensure that approvals are processed quickly, reducing delays and increasing overall efficiency.

 

Monitor and Optimize the Workflow

Once your approval workflow is automated, it’s important to continuously monitor its performance. Automation doesn’t mean “set it and forget it.” Regularly review the workflow to identify areas for improvement.

Key metrics to monitor include:

  • Approval cycle time: How long does it take for an invoice to move through the approval process?
  • Invoice exception rates: How often do invoices fail to match purchase orders or get flagged for review?
  • Payment timeliness: Are invoices being paid on time to avoid late fees?

With automated systems in place, you can generate real-time reports to track these metrics and use the data to optimize the process. If you notice that certain approval steps are taking too long, you can adjust rules, streamline workflows, or provide additional training for approvers.

 

Ensure Compliance and Security

In AP, maintaining compliance with regulations and ensuring the security of sensitive financial data is critical. Automation helps ensure that all invoices go through the necessary approval steps and that the audit trail is intact. 

Additionally, automated workflows ensure that all approvals are handled by authorized personnel, reducing the risk of fraud. Role-based access controls, encryption, and multi-factor authentication further enhance the security of your AP process.

 

Train and Educate Your Team

Even though automation simplifies many tasks, it’s important to train your team on how to use the new system. Employees need to understand how to submit invoices, approve payments, and handle exceptions. Our team provides training on Flowis for key users to help them understand the system. Flowis University also offers helpful guides and documentation for employees to learn the process. With clear guidelines and proper training, you’ll ensure a smooth transition and successful implementation.

 

Reap the Benefits of Approval Workflow Automation

Once your approval workflow is automated, you’ll start seeing immediate benefits:

  • Faster approval times: With automated routing and reminders, invoices are processed faster.
  • Reduced errors and fraud: Data is entered automatically, reducing human error and minimizing fraud risks.
  • Improved visibility and compliance: Automated workflows provide transparency and ensure that you comply with internal policies and external regulations.
  • Increased productivity: Employees can focus on higher-value tasks, rather than being bogged down by manual, repetitive work.
  • Cost-effective: Auto-routing, approvals, and customizable checks reduce labor costs and streamline the invoicing process.

 

Automating your approval workflow can significantly improve the efficiency of your AP processes and enhance your business’s performance. By evaluating your current workflow, selecting the right automation tools, and automating tasks like data entry and invoice matching, you can create a more streamlined and secure operation.

Flowis helps companies automate approval workflows, boosting productivity and efficiency. Its intuitive interface and flexibility make it ideal for companies looking to optimize their operations.

Book a demo with us to discover how Flowis can help automate your approval workflow.

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