How Workflow Automation Speeds Invoice Approvals
Speeding Up Invoice Approvals with Workflow Automation
If you are having more trouble invoices approved on time these days, you are not alone.
Fifty-nine percent of accounts payable (AP) departments say their business has paid an invoice late because of the shift to remote working, the Institute of Finance and Management (IOFM) reports.
Before they can be paid, invoices must be captured, verified, approved, and posted to an enterprise resource planning (ERP) application or accounting system. All those tasks can take a lot of time, especially when staff work from home and rely on manual or semi-automated processes.
Slow invoice approvals are undoubtedly a headache for weary AP professionals.
But paying invoices late also results in:
- Late payment penalties
- Missed opportunities to capture early payment discounts
- More calls and emails from frustrated suppliers
- Difficulty forecasting cash flow
- Potential disruptions to your supply chain
- Loss of key suppliers and reputational damage
Over time, late payments to suppliers also can negatively impact an organization’s credit score.
The problem with manual routing
With AP having an outsized impact on an organization’s financial health, it could be argued that slow invoice approvals are a canary in the coal mine indicating big problems in paying suppliers.
Traditionally, invoice approvals have been paper-based, with invoices arriving via the mail, being reviewed by AP staff, and physically routed through inter-office mail to purchasers for approval. If multiple approvals are required, or if something looks off, the invoice is sent to another approver.
Any questions about the invoice may require days or weeks of back-and-forth emails and phone calls. And missing invoice information can grind the entire approval process to a standstill.
Recently, many organizations began routing invoices for approval via email. When they couldn’t get into the office during the pandemic, these organizations told suppliers to submit invoices via email.
Whether invoices are physically routed for approval or sent to purchasers via email, it’s easy for invoices to become lost or misrouted. Invoices can languish on the desk or in the inbox of someone who is out of the office. AP professionals and approvers may not be sure whether the invoice is a duplicate. And AP professionals can never be sure where invoice approvals stand in the process.
A better approach to invoice approvals
Dynamic workflow automation eliminates friction in the invoice approval process. Consider an expert JD Edwards consulting partner to help with this automation process.
Invoices are digitally routed to the appropriate individual based on pre-configured business rules. Unique rules also can be established for different business units and different types of invoices. Approvers are notified of invoices awaiting their approval and alerted when an invoice approaches its due date. Invoices can be automatically escalated to a manager if an approver doesn’t act.
Approved invoices are posted directly to an organization’s ERP or accounting software, without AP professionals having to lift a finger. Invoice images and related are securely archived based on an organization’s document retention requirements and instantly accessible 24/7 by authorized users. Centralizing the storage and retrieval of invoice information reduces back-and-forth communications.
Dynamic workflow automation also provides AP professionals with real-time visibility into the status of invoices awaiting approval. And dashboards highlight inefficiencies in the approval process.
Additionally, standardizing invoice approvals with an automated solution guarantees separation of duties, ensures that corporate business rules are followed, enforces separation of duties, tracks all actions taken on an invoice, and prevents documents from being destroyed ahead of schedule.
The benefits of dynamic workflow automation
Dynamic workflow automation can be an asset to any AP department. Automating invoice approvals helps organizations avoid late payment penalties, capture more early payment discounts, reduce calls and emails from suppliers, and more accurately forecast their cash. Eliminating the need for staff to push around invoices via paper and email also frees them to focus more time on higher-value tasks.
And dynamic workflow automation helps staff be more efficient, no matter where they work.
Getting invoices approved can be overwhelming. But it doesn’t have to be.
With dynamic workflow automation, invoices can be approved faster than ever.