What Does An Invoice Approval Workflow Look Like?
In order to facilitate the flow of information and to secure internal processes, it is essential to implement an automated invoice validation workflow, a set of successive approval levels carried out by different parties. How to set up an efficient invoice validation workflow?
Automating invoice approval can help reduce labor, increase accuracy, and allow your team to focus on more important tasks.
Why do You Need Approval Workflows?
Invoices are the lifeblood of your business. They represent the money you make and the money you spend, and they're a critical part of your financial health. The problem is that sometimes mistakes get made. Invoices can be sent with incorrect information or to the wrong email address, which can cause a lot of problems for you and your customers. That's why it's important to have invoices approval workflows in place.
- To prevent sending invoices without approval – Sending out unapproved invoices can harm your business’s reputation with customers if they do not receive their order as expected, or worse yet receive it late because it took longer than expected to get approved
- To save time – Invoice approval workflows help you to streamline your invoice payment process. This means less time spent on manual tasks and more time spent doing what you love!
- To reduce errors – Invoice approval workflows also reduce errors by ensuring that everyone involved in the process has access to all of the information they need. When everyone has access to this information, it’s easier to avoid mistakes like paying an invoice twice or missing a payment altogether.
By creating a system that requires an invoice to be approved before it can be paid out, you can ensure that all payments are made correctly, your customers are happy, and your finances are healthy!
The number of validation steps goes hand in hand with the size of the company: the larger the workforce, the more essential it is to set up workflows to secure the validation process, but also to speed it up. The same applies to all departments that process sensitive/financial data (accounting, management, payroll, purchasing and sales, etc.), setting up workflows is essential to keep track of and monitor information flows.
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What are The Benefits of Having an Automated Invoice Approval Workflow?
Invoice approval is a key component of any business process. It ensures that the right people are involved in the decision making process, and it protects you from paying for services or goods that have not been delivered.
An automated invoice approval workflow helps you manage your invoices more effectively and quickly, without requiring you to devote time and energy manually approving every invoice. The benefits include:
- Time savings. Employees can spend less time checking and approving invoices, which means they're more productive.
- Better management of the business' finances. The finance team has more time to focus on other tasks that are just as important, such as managing customer relationships or developing the sales team.
- Less stress. Employees don't have to worry about how to approve an invoice because it's all taken care of automatically. This leads to less stress in the workplace and makes it easier for employees to focus on what they do best.
- Increased Accuracy - Automated invoice approval workflows reduce errors in invoice processing by eliminating human error in data entry and review. Additionally, automated invoice approval workflows provide real-time visibility into your company's financial data, which helps you make better decisions about where to allocate resources.
- Reduced Costs - Having an automated invoice approval workflow reduces the costs of processing invoices by automating the process. This saves time and money spent on manual labor, which is one of the biggest costs associated with invoice processing.
How Does it work?
The aim of any workflow is to facilitate the flow, modification and publication of data exchanged by staff.
You don't have to remember to review each invoice before it's paid. The invoices will automatically be sent for review by the proper people at the appropriate time — whether that's weekly, monthly or quarterly — depending on your business needs.
The right people will be involved in reviewing each invoice, so no one gets left out of the process and there's no possibility that an invoice will be inadvertently paid without proper approval from management or accounting staff.
If someone forgets to approve an invoice, they'll receive a reminder email or text message reminding them to do so — so no one has to worry about missing deadlines or getting behind on their workloads because they forgot about an important piece of paperwork!
How to set up an invoice validation workflow?
To begin with, you need to analyse your existing validation procedure with all its parameters:
- How many supplier invoices do you process per month?
- How many customer invoices do you process per month?
- How many validation steps are implemented?
- Who are the stakeholders in the process? If one of them is missing, who should be delegated the task?
- What are the validation steps? What is the timeframe?
- Is your accounting software compatible with your invoice payment solution?
The definition of the steps is the mainstay of the workflow: in order not to make it too long and complex, break down the process and visualise it. Remove any step that is not 100% essential and establish clear rules for validating documents. Before officially deploying your workflow, test it internally.
Streamline your Invoice Approval Workflow with Libeo
Libeo is a fully integrated and automated business-to-business payments platform, bridging the gap between invoices, payments, reconciliation and accounting.
Libeo enables SME business owners, financial directors and accountants across Europe to centralise and pay their supplier invoices in one click, without chasing bank account details or logging into your online banking.
1. COLLECT ALL YOUR ACCOUNTS PAYABLE
An automated collection system allows you to receive supplier invoices electronically, so there is no manual inputting required by your accounting staff. This streamlines the process and saves you time and money by eliminating clerical costs. Here is an overview of how automated collection of invoices work:
- Perform bulk imports of your accounts payable invoices from your computer or smartphone through OCR technology. This feature automatically extracts the data and convert it to electronic format.
- Connect your Libeo account in one click to over 200 supplier websites to collect your invoices.
- Send your supplier invoices directly to a dedicated Libeo email address and find them in your space.
2/ APPROVE YOUR INVOICES ON TIME
Once the invoices are imported into Libeo, their data is instantly extracted thanks to Optical Character Recognition (OCR) technology. The information entered is displayed in a tab on the right:
- Billing date
- Due date
- Invoice number
- General account
- Total excluding and including taxes
- Accounting amounts and VAT to be filled in
If an invoice appears to be a duplicate, you can check the documents against each other and delete the duplicate:
When you find two invoices that seem identical, check them against each other to see if they match. If they do, delete one of the records.
3/ APPROVE YOUR INVOICES ON TIME
You can approve in a single step or in multiple steps. These approvals can be done at two stages: during the review ("Review" tab) or the payment ("Pay" tab):
In "Check", click on the invoice to be processed, then at the bottom of the check form click on "Request approval";
To configure your validation workflows, set up automation rules: these automations prevent you from having to repeat the same actions:
Create a multi-step approval. Add the email(s) of the first approvers in the same box. When the stage 1 approvers all validate the invoice, only then will the approval request be sent to the stage 2 approvers and so on. Once all approvers validate the invoice, it will be transferred to the "Pay" section of your Libeo account.
If a refusal is issued, then it will no longer be accessible by other approvers and will have the status "Approval refused" in Libeo. An informative email will be sent to the user who requested approval of the invoice.
4/ SCHEDULE YOUR PAYMENTS
Plan the payment date of your supplier invoices and follow them from a dedicated dashboard, updated in real time. You can choose between the following payment options:
- Prepare payment at custom date
- Prepare a partial payment
- Indicate a non Libeo payment
- Request approval
Bonus: if you have any doubts about an invoice, you can the payment on hold and request approval.
5/ EXPORT YOUR DATA ENTRIES
Define an export template (public or custom) and transfer the data to your accounting in a few clicks. Libeo saves you time by integrating with all your accounting and management softwares:
- Cegid Loop
The result is a sixfold reduction in invoice processing time. The procedure is smoother and more secure, which improves payment times and therefore the supplier relationship.
PAYMENT AS YOU DREAMED IT...
Plan the payment date of your supplier invoices and follow them from a dedicated dashboard, updated in real time.Get a demo
What does an invoice look like?
The invoice is a document that can be used to record the transaction between a seller and buyer. It is an official statement of the terms of sale between two parties in which the price, quantity and date of sale are clearly stated. An invoice usually has four sections:
- Contact details: The contact details of your business, including your name, address and phone number.
- Date: The date on which the invoice was issued. This must be accurate as it will affect how long you can claim interest if payment is late (more on this later). If the customer has requested a specific date then that should be used instead of today's date.
- Items: A list of the items or services provided by your business, with prices listed next to them (if necessary). You should also include VAT where applicable, although this isn't always necessary for invoices issued within the UK (see below for more information).
- Total: The total amount due from the customer at the end of their payment period (usually monthly or quarterly).