We all love timely payments, and invoice approvals are a significant contributor here. If an invoice approval bottleneck exists, your employees have to allocate extra time to overcome or work around that bottleneck. That means additional investments in resources and plenty of time wastage. In this article, you can learn the typical challenges in an invoice approval workflow and how to overcome them.
Invoice approval bottlenecks can hamper the quality of service of any business. It also raises risks that your customer may move on to competitors who make prompt payments.
Although businesses use ERP systems, unfortunately, many companies still manually carry out certain business functions, like invoice processing. It increases the cost and time required to process invoices.
However, there is a solution to removing invoice approval bottlenecks—the answer: Invoice automation solutions. Read on to identify the problems and solutions.
There are plenty of bottlenecks in the invoice approval process. If your business is managing a large number of emails every day, the chances of missing an email related to an invoice are readily present. So, invoices that you send through emails might sit in the approver’s inbox without getting processed. Then, if you forward the invoice to the next approver, supporting documentation may be missing. Thus, the invoice recipient must contact the sender to get the missing data. Downloading invoices automatically from portals using invoice automation will help avoid missing invoices as they get stored centrally and routed appropriately.
If an invoice gets routed to the incorrect approver, there can be a substantial time delay in the invoice approval process. Because even if the wrong approver realizes that the invoice needs to get sent to the correct approver, it will impact the time and cause delays. These situations are widespread. Office managers dealing with many invoices may send invoices to the wrong approvers.
Invoice approvers will need verification before approving the invoices. It mainly happens in the case of high-value transactions that many times double verification occurs. When it comes to larger purchases of materials, the invoice approver will definitely ask questions for verification. However, poor communication can happen when there is no written evidence of the approval of raw materials by the factory managers.
If there isn’t an established system to track the approval system of every invoice, bottlenecks are unavoidable, unfortunately. Accounts Payable (AP) department staff members can face many difficulties tracking the approval status of every individual invoice. Although your AP employees can run reports of unpaid invoices, it’s not possible to identify which invoice approver is approving which invoice as there could be many approvers in the organization. Following up on invoices is a difficult and time-consuming process.
Vendors are responsible for communicating the payment status of invoices. If your invoice doesn’t have a centralized system for checking invoice approval status, every vendor inquiry implies receiving multiple emails. And without a centralized system, it’s impossible to efficiently alert the invoice approvers and the AP staff when a vendor is inquiring about payment. So, yet again, an invoice bottleneck is inevitable.
Statista says – In 2019, 28 percent of surveyed enterprises in the infocomm and media sector in Singapore used e-invoicing. Meanwhile, the overall adoption rate of e-invoicing across all sectors in Singapore stood at 21 percent. Electronic invoicing, or e-invoicing, can help to lower the costs for businesses and reduce their carbon footprint.
Bottlenecks in invoice approval mean that you lose out on time. So, you must adopt methods to steer clear of these bottlenecks. Implementing invoice automation software is a fantastic way to overcome these invoice approval bottleneck issues. You can learn more about how many invoice automation systems automate invoice approval workflows.
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