Define invoice approval manual#
From invoices that don’t match the expenses to manually tampered invoices, fraud is the biggest problem when an organisation follows a manual invoice approval process. Vulnerability to fraud – Fraudulent billing is among the key challenges faced by an organisation’s accounting department. Such manual errors could lead to overpayment, underpayment, and several other problems which could cause financial and legal troubles for an organisation in the long run. Manual errors – No matter how reliable an organisation’s personnel are, human errors could never be avoided totally. Here are some of the challenges faced by an organisation in the invoice approval process: As the number of invoices increases, it gets difficult for an organisation to keep up and process every invoice on time. Challenges Faced in the Invoice Approval ProcessĪn invoice approval workflow process could become time-consuming and cumbersome. Once the invoice is processed and paid, the invoice is closed.
Process payment – Once the invoice is approved, it is forwarded to the finance team for processing the payment. Some follow a linear chain of approvals, while others follow direct approvals from concerned departments based on the type of document.
The approval hierarchy differs from organisation to organisation and from department to department. Routing invoice for approval – Once an invoice is validated and matched to the related purchase documents, it is routed to the specific approvers for approval and subsequent payment process. Defining exceptions – When an invoice fails the validation stage due to missing information or any discrepancy, they are forwarded to a specific team to follow up with the vendor and fix errors and again reroute it for approval. This also includes validating the invoice fields with the government GST data. This process involves identifying and linking the related purchase documents such as purchase orders, purchase requisitions, order receipts, and more. Validating the invoice – The next step is to validate the invoice.
An automated solution like Clear Capture can help digitise the invoices in a custom format as required by the organisation and ensure that only 100% correct & compliant invoices are posted. Capturing the invoice details – Before an invoice can be processed, all the relevant details mentioned in the invoice must be captured in the organisation’s enterprise resource planning (ERP) or accounting system. While the invoice approval workflow could differ from company to company, it generally includes the below-listed steps: Stages Involved in the Invoice Approval Workflow After verifying the details of the vendor invoice, it is then sent to the accounting department for further processing and consequent payment. Typically, the invoice approval workflow starts when an organisation receives a vendor invoice, it is then checked and reviewed by the purchasing department. An invoice approval workflow acts as a checklist to ensure that there are no inconsistencies or mismatches, and that the invoices are paid on time.Īn invoice approval workflow includes the review and approval of invoices before the payment for the same is processed.
Define invoice approval series#
Meaning of Invoice Approval Workflow and Its ImportanceĪn invoice approval workflow refers to a series of steps that an organisation follows for clearing the vendor invoice.
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