What is Invoice Approval?
Evaluating and approving supplier invoices before completing the payment is known as invoice approval. Typically, the invoice approval process begins when the buyer gets a supplier invoice (by email, post, etc.). The invoice is subsequently classified and delivered to the appropriate stakeholder for approval.
Understanding Invoice Approval
Invoice approval involves evaluating and approving supplier invoices before posting them as a cost in the ERP system and sending them for payment.
Accounts payable software also makes the invoice approval process more manageable by delivering the invoice details in digital format for the approver to review. Furthermore, the system can provide proposed coding based on the company's chart of accounts and rules and historical data. Finally, the invoice validation procedure can be processed quickly and conveniently using a computer or mobile device.
Steps to Create an Invoice Approval Process
Most companies have a defined procedure for dealing with incoming bills. While the processes differ from one company to the next, they can be broadly classified into two types:
- Invoices that have a purchase order or purchase requisition
- Invoices without a purchase order or associated requestÂ
Here are a few actions that businesses may take to ensure faster and more accurate invoice approval:
Create an invoice
All necessary information should be collected or manually entered into an organization's invoice approval loop to ensure that an invoice is handled on time.
Validation or PO matching
The following step is to categorize the invoice. It entails finding and associating other associated purchasing documents such as purchase orders, order receipts, purchase requests, and so on.
Define exceptions
When invoices fail the validation stage due to a mismatch or missing information, they should be routed to specified personnel who can correct the issues and reroute them for approval.
Route approvals
Once invoices have been checked and matched, they are directed to the appropriate approvers based on information from one of the purchasing documentation (such as PO number, requester name, and department).
Process payment
If an invoice is approved, it should automatically be forwarded to the accounts department for payment processing. An invoice can be closed once the payment has been processed.
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