The invoice approval process is integral to just about every business. It covers multiple departments and purchases of all sizes.
Handling invoices correctly is essential to proper accounting and cash flow for your business. If this process is manual - typical of many businesses, it can be slow and error prone.
While some invoices reach the end of the process correctly, sometimes others fall by the wayside, due to common problems with the invoice approval process. When there are many touchpoints for an invoice for example, such as physical document preparation, routing, manual data entry, and error correction, it’s easier for errors to occur.
An inefficient invoice approval process contains many hidden costs, particularly if there are several manual steps involved. Every time an invoice is physically handled before payment is made the risk of error increases. This contributes to higher labor costs, longer processing cycles, and cash flow irregularities.
Automating the invoice approval process, can bring many benefits:
- Easier to scale up without increasing workforce
- Manual matching and physical routing of paper documents becomes thing of the past
- Elimination of duplicate payments
- Creates an automatic audit trail
- Reduces invoice disputes significantly
Here are three ways to increase the efficiency of invoice processing.
Automate invoice matching, purchase orders, and receipts
When you automate invoices, purchase orders, and receipt generation, you can speed up the invoice process considerably.
Your process can be designed so that each invoice that arrives is matched against the correct purchase order and receipt. When invoices match, they are routed straight through any necessary approval steps right to your company’s finance system.
Manual matching of invoices, purchase orders, and receipts becomes outdated, freeing up staff time for more important tasks.
Automate invoice approval routing
Creating an automated invoice approval process requires that you define the chain of authority for approval and create automatic connections that deliver the right electronic document to the right person at the right time.
You can also design different approval paths. For example, if invoices for under a certain amount only need the approval of the section manager before finance will arrange payment, you could make it branch out separately from the process for invoices for over that amount, which must be approved by the section manager and the department head before finance will arrange payment.
A great advantage of an automated invoice approval process is that it can be set up to automatically create a “paper trail” that provides visibility into every step of the process.
Authorized users can see where in the process an invoice is at any given time, and if ever there is a question about whether a step has been completed, the electronic audit trail can answer the question.
This can be of great benefit when dealing with things like software license audits. Proof that a license was paid for can be produced instantly, saving all parties time and trouble.
What you need to look for
The components that make up your automated invoice approval process should be tailored to your company’s needs, so it’s important to choose workflow software that provides flexibility to customize workflows, such as Invoice Workflow.
Invoice workflow for Dynamics AX2012 provides a high level of flexibility in invoice routing and approval from any device, and is extremely easy to set up and configure according to a company’s business rules. The automatic notifications component in invoice workflow also ensures on time approval of invoices and prompt handling of escalations and exceptions. Further benefits include:
- Typical ROI of 12 months (try out our Invoice Workflow ROI calculator here)
- Save time and reduce costs related to vendor invoice processing
- Strengthen relationships with suppliers with timely payments and more efficient invoice handling
- Efficient and customisable approval workflows
- Leverage Dynamics AX account structure with new and improved dimension validation
If you’d like to learn more about how Invoice Workflow can increase the efficiency and reduce errors with your invoice processing, register for our invoice workflow webinar here, where you will hear from one of our invoice processing experts who explains the benefits and implementation in more detail.
While you’re waiting for our webinar, you can download our Invoice Workflow factsheet here which gives you an overview of how it can help your business.