Last editedOct 20212 min read
Are you still manually approving each invoice? A paper-based workflow can be less than efficient, to say the least. Between document filing, data entry, and waiting for payment approval, the process can use hours of valuable time each day. Fortunately, technology has made the invoice approval process far more efficient. Here are a few reasons to consider implementing a paperless invoice approval system instead.
Invoice approval checklist
We’ll start by going over the traditional workflow for invoice approval. When you use a paper-based system, you’ll need to go through the following invoice approval checklist each time:
Type and print purchase order
Mail purchase order to vendor
Wait for invoice to arrive in the post
Get relevant personnel to sign invoice approval form
Send a cheque to the vendor
Check bank accounts for verification that payment has been received
Balance your financial accounts to reflect payment
This checklist describes the most basic process for issuing a purchase order, receiving an invoice, approving the invoice, and then issuing payment. Naturally, if there are any errors along the way the whole process can involve additional steps. From data entry typos to members of staff out on sick leave, it can ultimately take weeks if not months to approve a simple invoice.
Paperless invoice approval workflow benefits
Going paperless with your workflow offers numerous benefits. It reduces approval time to keep documents moving rapidly through the accounts payable process. This improves cash flow because your company doesn’t have all its funds tied up in unpaid invoices and purchase orders.
Going paperless offers a higher level of transparency and control. With easy automatic retrieval, you can quickly sort through financial documents and find the invoice you’re looking for. You can organise invoices by due date, reducing both late and duplicate payments.
Key features of invoice approval workflow software
What does the workflow look like when you go paperless with accounting software and automation? Here are a few key features to look for in any invoice approval workflow software.
Document capture software transforms paper invoices into electronic ones for easier transmission and processing. Digitising your documents also ensures that you can keep them in a cloud-based filing system to save space.
Classification is another feature included in all invoice approval workflow software. The software classifies documents, easily separating purchase orders from receipts, invoices, and bills. This keeps everything in the right place without important paperwork going missing.
Indexing is the next stage in the workflow, with software determining the type of document and then putting it in the proper order for retrieval. This eliminates the need for in-house staff to manually enter invoice numbers and other data. Document management software pulls all the relevant details from the document and exports it to a central system.
Three-way matching is another feature to look for. This automatically ensures that the purchase order, packing slip, and vendor invoice all have matching details to ensure you aren’t charged for items you never received.
How to choose the best paperless invoice approval system
There’s a wealth of invoice approval workflow software out there to choose from, so how can you find the best fit for your business? In addition to looking at fees and security features, you must also consider its basic functions. Be sure to look for a program that can automate your full accounts payable process. In addition to the approval workflow, it ideally will be able to handle:
Invoice creation
Purchase order creation
Email notifications
Financial reporting
With full automation, you can cut both costs and time for a far more efficient workflow. Invoices are quickly scanned, captured, classified, indexed, and exported to a document management system. From there, the invoice data is routed to the appropriate manager where it can be approved with the click of a button.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.