When it comes to adopting an automated invoice approval workflow, there’s a lot of ground that needs to be covered. Before delving into why you should consider an automated invoice approval workflow, let’s talk about the traditional invoice approval workflow.
Invoice approval consists of executing a complicated series of steps that can be cumbersome. The invoice approval workflow refers to the codified steps followed by AP personnel in the P2P (procure-to-payment), maximizing the cost-effectiveness and efficiency of paying invoices.
The typical steps of the invoice approval process are:
However, it’s not just these steps as mentioned above that constitute the complete cycle AP process. There is a lot more to be done beyond the five steps. Also, the approval process varies from organization to organization.
One of the most significant drawbacks of the traditional invoice approval workflow is that the process is highly time-consuming. An IOFM (Institute of Finance and Management) survey showed that 84% of AP personnel’s time is spent executing manual AP functions. Therefore, delayed payments due to the excessive time spent manually processing invoices is a major obstacle to productivity and profitability. The biggest motivators for investing in an automated invoice approval workflow are the time-saving and productivity benefits of the process.
Human error is another significant aspect of manually processing invoices. Two of the most common errors in traditional invoice approval workflow are duplicate payments and fraud. Delayed payment of invoices can often lead to vendors sending the same invoice twice, ultimately leading to double payments. Without using technologies like automated AP software, the same invoice is at the risk of being processed more than once.
Transparency issues are unavoidable with paper-based or manual invoice processing. It’s challenging to ascertain the position of an invoice in a pipeline. Other common transparency issues include not knowing who has to approve the invoice or whether the invoice is a priority. Therefore, lack of control is an unavoidable consequence. These issues are easily avoidable with automated AP processes.
The bright side: Gain with automated invoice approval workflow
Apart from the benefits mentioned above, there are other advantages of automating invoice approval workflow. Many organizations were effective in their invoicing processes during the pandemic due to invoice automation.
The Levvel report 2021 states – “The last year has proven the value of prioritizing technology in business, and organizations that do so are able to stay flexible and prepared for unforeseen challenges. The COVID-19 pandemic has brought a number of such hiccups, with supply chain outages, shutdowns, and travel restrictions pushing organizations to the brink and testing business continuity. Fortunately, when many organizations went full remote, many using an AP automation tool were able to carry on relatively uninterrupted. But this requires choosing a software that is modern, full-featured, and well-suited for the organization.”
We would encourage you to explore more on automating invoice management with GetMyInvoices.
See the benefits of automated invoice management:
Better overview. Less accounting work. More time for your ideas.