Working in the finance department? Let’s admit it: Processes involving accounts payable are some of the most tedious yet critical tasks to handle — from centralizing all the invoices the department receives, to ensuring the information they contain match with other documents like purchase orders, to securing approval from different finance officers.
Sounds cumbersome right? That’s why most organizations are now using automated systems (e.g. invoice approval workflow software) to improve efficiency and avoid issues like delayed payments.
The rise of these innovative tools has taken away a large chunk of burden carried by the finance team. In this feature, we will be specifically discussing the significance of automation in invoice approval.
Traditional Invoice Approval Workflow: Challenges
Here are the main challenges encountered by people involved in the traditional (read: manual, paper-based) invoice approval workflow:
Longer time spent in processing and approving invoices
It is time-consuming for an AP team to manually check, validate, and match invoices. These slowed-down processes lead to longer waiting time before the papers are routed to the approving figures. This waiting game continues on the end of the approvers. This domino effect can cause the company to incur late payment fees.
Larger possibility to make mistakes
Unlike when a team uses an invoice approval workflow software, its paper-based counterpart is more prone to mistakes. Issues like duplicate payments or overpayments can be encountered if invoices aren’t verified to be correct — either by accident or by an employee’s fraudulent behavior.
Little visibility of approvers
Many AP staff complain about the little visibility of the invoice approvers. Oftentimes, just when their go signal is needed, they are usually out of the office and are hard to be reached out. This delays the process and eventually leads to delayed payments.
Invoice Approval Processes: Things to Automate
Utilizing an invoice approval workflow software helps resolve the challenges mentioned above. To get a better grasp on how this awesome tool works, read below the things that it automates:
After invoices are received by the AP team, they are required to be counterchecked and matched with supporting documents. Automating this labor-intensive process will help cut down human errors and accelerate the initial invoice processing period.
Invoice approval routing
Once invoices are processed, they are now good for routing and approval. By making these steps cloud-based and digital, reaching out to different approving entities can now be done more efficiently. The software allows a company to set a predetermined route and configure verification and approval settings.
Email approval and notifications
This tool typically offers two options for the verifiers and approvers. First, they can log into the system so they can perform their task of verifying and approving invoices. Another way is by doing it on the go via email verification. Either way, the software can be set to automatically send out notifications that an invoice has been approved.
Tracking and performance measurement
Through an automated invoice approval workflow, companies can now also easily monitor or track the status of an invoice. Certain software also feature sophisticated setting where one can measure the performance of the whole process and subsequently identify and resolve issues or bottlenecks.
Nexus offers invoice approval workflow software that can help rid your AP workflow of issues. Contact us today and let’s discuss how our solutions can help you improve your business.