Accounts payable (AP) teams have long struggled with manual invoice approvals that involve chasing down signatures and slogging through mountains of paperwork. But in today’s increasingly digital business world, many AP teams are turning to automation to enhance their workflows — and the invoice approval process is no exception.
To boost efficiency, reduce the risk of human error, and tackle challenges like remote work arrangements, 71% of AP teams have automated their invoice approval workflows. By embracing AP automation, these teams can streamline their processes and speed up invoice processing times while also improving vendor relationships. This transformation not only saves valuable time and resources but also empowers organizations to focus on strategic financial planning and growth initiatives.
The Typical Invoice Approval Workflow
Traditional invoice approval workflows are tedious and time-consuming. They require AP teams to waste valuable time chasing down hard-to-reach decision-makers for signatures and input on invoices. Larger payments often require approval from multiple stakeholders, which further prolongs processing times. Additionally, if vendors send invoices in multiple formats — like email and mail — there’s an increased risk of duplicate payments.
The shift to remote and hybrid work models has introduced additional challenges to the process. Manual invoice approval typically requires approvers to receive a physical copy of the invoice before returning it to the AP department for payment, which isn’t feasible for remote employees. These obstacles make it difficult for AP teams to manage approvals in a timely manner, which can lead to overdue payments and strained vendor relationships.
Manual vs. Digital Invoice Approval
The inefficiencies and challenges that stem from manual invoice approvals underscore the need for a digitized approach. A paperless invoice approval platform scans and uploads invoices to a central repository where they are automatically routed to the appropriate approver. Authorizers receive automated notifications, which means AP teams don’t have to chase them down or send follow-up reminders.
Additionally, centralizing invoices into a single system minimizes concerns of redundant invoices or duplicate payments. Embracing paperless solutions offers a plethora of benefits compared to the traditional manual approach, ultimately offering a more efficient, streamlined AP workflow.
The Advantages of a Paperless Invoice Approval System
Digital invoice approvals can help AP departments streamline this process in a number of different ways. From gaining visibility into the AP process to managing payments in a more timely manner, going paperless has many benefits.
Ease of Use
A robust paperless invoice approval system significantly simplifies the approval process. Solutions like MineralTree enable decision-makers to approve invoices with just a click of an email, eliminating the need for laborious back-and-forth communication and managing stacks of physical documents.
Timely Payments
87% of AP teams say speed of payment is important to their suppliers. But due in part to recent supply chain disruptions like delayed or partial deliveries, 39% of AP teams have experienced payment delays or reconciliation issues. With manual AP processes, these delays can be exacerbated, since an invoice can get lost in the shuffling of papers, delaying approval and ultimately payment.
An invoice approval system makes it easy for decision makers to quickly approve payment, since this can be done via email. Additionally, reminders can be sent automatically. By digitizing the approval process, AP teams can accelerate payments to ensure prompt payments to vendors that support the maintenance of vendor relationships.
Reduced Human Error
Manual invoice approval processes are prone to human errors like incorrect data entry and misplaced invoices. By automating the approval process and eliminating unnecessary human touchpoints, AP teams can significantly reduce the likelihood of these errors occurring.
More Visibility
With a paperless approval system, AP teams gain greater visibility into the invoice approval process. Real-time tracking and reporting of invoice status prior to posting allow for better decision-making and the identification of potential bottlenecks in the workflow, empowering the AP department to continually improve its operations.
Accurate Invoice Capture
Accurate invoice data is table stakes, but it can be difficult to achieve with manual processes. Paperless solutions like MineralTree use a blend of Optical Character Recognition (OCR) technology and human review to ensure the accuracy of invoice data that’s entered into the system. Unlike approaches that rely solely on human review or solely on technology, the powerful combination results in an average of 99.5% accuracy in terms of invoice capture.
Making the Switch to a Digital Invoice Approval Process
It’s clear that the traditional, manual approach to invoice approvals no longer provides the efficiency and scalability required in today’s business environment. Ready to make the switch to a paperless invoice approval system?
Identify Current Challenges
Identify current pain points and challenges with your existing invoice approval process before implementing a paperless invoice approval solution. An understanding of your team’s most significant pain points and concerns will help you identify a solution that meets your needs and solves long-standing challenges.
Choose the Right Tool
Selecting the right tool is crucial to a successful transition. A reliable and user-friendly paperless invoice approval system like MineralTree can make the entire process smoother and more efficient. MineralTree also integrates with your existing enterprise resource planning system so your ERP remains the system of record.
Automate the Entire Process
While automating invoice approval is a significant step toward a more streamlined AP process, you can unlock even more efficiency gains by automating the entire end-to-end AP process. From invoice receipt to payment processing, automating the AP workflow promotes seamless operations and substantial time savings.
Invoice Approval Case Studies
Organizations across industries can reap the advantages of a paperless invoice approval solution. Let’s take a closer look at how two MineralTree users gained visibility into their processes and improved their workflows:
House of Cheatham Gains More Insight Into the Process
House of Cheatham is a U.S. manufacturer of personal and beauty care products. With just one AP staff member relying on manual processes, the organization struggled to keep pace with the high volume of paper invoices and checks. The organization’s manual AP process also failed to provide real-time visibility into and control over invoices, approvals, and payment status.
In response to these challenges, House of Cheatham implemented MineralTree to streamline their invoice management process. The solution equipped the organization with greater visibility into the approval process, helping them identify and eliminate inefficiencies almost instantly. As a result, the manufacturer improved invoice accuracy and reduced processing times.
MTB Improves its Invoice Management Process
MTB, a growing franchisee, faced major challenges with its manual AP approval process. Paper-based invoices, manual data entry, and time-consuming approvals bogged down efficiency and created time-consuming work for AP staff.
After implementing MineralTree’s solution, MTB saw a significant reduction in manual tasks. The organization now receives up to 90% of invoices by email, which triggers MineralTree’s automated invoice capture and eliminates the need for manual data entry and hand coding. As a result, MTB’s AP team members were able to shift their focus toward more strategic initiatives, and the company halved its time spent on AP while growing its volume of invoice approvals.
Final Thoughts
The automation of invoice approvals is a critical step toward streamlining the AP process. With a paperless invoice approval system like MineralTree, you can achieve more timely payments, reduced errors, increased visibility, and accurate invoice capture. But this is merely a starting point.
Invoice approval automation should be part of a broader effort to automate the entire AP workflow. Embracing automation empowers AP teams to operate more efficiently, enhance vendor relationships, and make informed financial decisions, leading to better business outcomes as a result.
Ready to enhance your AP workflow? Request a demo of MineralTree today.
Frequently Asked Questions
What is the invoice approval workflow?
The invoice approval workflow is the process of reviewing and approving invoices before they are processed for payment. In traditional manual workflows, invoices are physically routed to different approvers for review and signature. In a paperless system, this process is digitized, allowing for faster and more streamlined approvals.
How do you implement paperless accounts payable?
Implementing paperless AP involves selecting the right software solution, integrating it with existing accounting systems, and training employees on how to use the new system. Solutions like MineralTree offer user-friendly interfaces and seamless integration with many ERP systems, making the transition smoother.
How do I set up a better invoice approval process with my current ERP?
To set up a better invoice approval process with your current ERP, consider integrating it with a paperless invoice approval system like MineralTree. This integration can enhance the visibility and automation capabilities of your existing ERP, streamlining the approval process and reducing manual efforts.
Does QuickBooks have an invoice approval system?
QuickBooks itself does not have a built-in invoice approval system, with the exception of QuickBooks Online Advanced. However, you can integrate QuickBooks with third-party solutions like MineralTree to incorporate robust invoice approval capabilities to your QuickBooks workflow.
