In business, managing invoices can get messy. Maybe you work with multiple vendors that submit invoices at different times and that require different levels of approval.
Here’s how the traditional invoicing process works: First, you receive an invoice and must forward it to the appropriate department for approval. If the invoice is large enough, it may even need to be approved by a C-executive.
If there are any mistakes or discrepancies on the invoice, it must be sent back to the relevant employee or vendor so that it can be corrected.
Eventually, once the invoice is fully approved, it is sent to accounting or finance for payment.
With so many moving parts, it’s easy for things to start falling through the cracks. And the more people are involved in the invoice approval process, the higher the chance of mistakes.
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Advantages of Automated Invoice Approval Workflow
So it pays to automate your invoice approval workflow with a software solution. Here are all the reasons you should create an automated invoice approval workflow:
1. Approve invoices faster
An automated invoice approval workflow lets you verify invoices with the help of artificial intelligence (AI). Don’t worry about going through invoices line by line to make sure they match up with your records. Let software do that for you and get rid of time-consuming follow-ups and other interruptions.
With the right workflow, you can make invoice approval as simple as a touch of a button. Employees can focus on their jobs and be more productive instead of worrying about tedious paperwork.
2. Automate invoice routing
When an invoice needs to be routed to another department, an automated workflow can ensure this happens. It automatically transfers the invoice to the next person in the chain of approval. This way, invoices don’t get stuck with one person and you reduce the overall wait time till payment.
3. Avoid duplicate payments
When you deal with many invoices each week, it’s easy to end up with accidental duplicates. A duplicate invoice can be costly and tiresome to fix.
But with an automated invoice workflow, duplicates are nearly impossible. This is because an automated workflow will scan invoices for invoice dates, numbers, and purchase details to make sure nothing is out of place.
4. Prevent losing invoices
Paper documents can be hard to keep track of. If you’re not careful, you might lose an invoice or two and need to ask the vendor to send it again, which takes time and effort.
An automated invoice workflow system, however, will help ensure you never misplace an invoice again. How? By securely storing digital copies of invoices in the cloud.
By having the invoice shared online in the first place, you’re less likely to lose valuable time searching for and replacing missing invoices.
5. Improve vendor relationships
An automated invoice workflow also helps ensure you pay invoices on time. As a result, your vendors will be much happier and want to work with you more because they trust you’ll get them paid in a timely manner.
Depending on the invoice workflow solution you choose, it may also facilitate better communication with vendors. For example, you may be able to add internal notes and comments to invoices before you share them.
6. Gain more transaction transparency
Another benefit of an automated invoice workflow is that you gain more visibility into vendor transactions. You’ll be able to trace every invoice to see where your money is going. This makes it easier to set budgets and improve financial performance.
On some automated invoice workflow platforms, you may even be able to search invoices so you can easily track down a specific order.
7. Leverage data insights
By automating invoice workflows, you’ll also be able to leverage a wealth of data insights via advanced reporting and analytics software.
For example, you may be able to see which vendors are generating the most return on investment (ROI) based on how much they charge for their services.
8. Maintain compliance
Every business is subject to strict tax regulations and other regulatory standards. Plus, you may have your own internal standards for invoice practices.
An automated invoice approval system can help ensure invoices comply with external and internal policies because it provides a digital trail of invoices that’s easier to audit and keep track of. It puts all your invoices in a central place for easy review.
9. Prevent fraudulent transactions
Lastly, cybercrime is on the rise. In 2021, it cost the world $6 trillion in damages. If you want to avoid being a victim of a cyber attack in our digital age, it’s important to have all your finances in order.
An automated invoice workflow will help prevent fraudulent transactions from occurring in your business by spotting them quickly and alerting you to any suspicious activity.
Ultimately, there are many reasons to automate your invoice approval workflow. It may take some time to set up, but it will be well worth it in the long run.
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