Accounts Payable Invoice Approval Workflow
Here is a step-by-step workflow for accounts payable invoice approval, designed to streamline the process and ensure accuracy and compliance. This workflow covers key stages from invoice receipt to final payment:
1. Invoice Receipt and Capture
- Action: Receive invoices via email, mail, or electronic data interchange (EDI).
- Task: Digitize paper invoices using EasyInvoiceManager’s AI invoice capture.
- Outcome: Invoices are captured and ready for processing in the AP system.
2. Initial Review and Validation
- Action: Perform an initial check to ensure the invoice contains all necessary information (e.g., vendor details, purchase order number, invoice number, amounts).
- Task: Validate against purchase orders, contracts, or goods receipt notes to confirm accuracy.
- Outcome: Invoices pass the initial validation and are marked as ready for approval routing.
3. Invoice Coding
- Action: Assign the correct general ledger (GL) codes, cost centers, and tax codes to the invoice.
- Task: The AP team or automated systems apply the appropriate financial codes based on the nature of the expense.
- Outcome: Invoice is correctly coded for accounting purposes and ready for approval.
4. Approval Routing
- Action: Route the invoice to the appropriate approver(s) based on predefined workflows in EasyInvoiceManager (e.g., department heads, budget owners).
- Task: Use automated workflows to send invoices to the designated approvers. Approval thresholds (e.g., amount limits) dictate the number of approval levels required.
- Outcome: Invoices are queued for review and approval by the designated approvers.
5. Approver Review and Approval
- Action: Approvers review the invoice for accuracy, legitimacy, and compliance with company policies.
- Task: Approvers may approve, reject, or request modifications. If rejected, the invoice is sent back to the AP team with comments.
- Outcome: Approved invoices proceed to the next step; rejected invoices are corrected and resubmitted as needed.
6. Exception Handling
- Action: Identify and resolve exceptions, such as discrepancies between the invoice and the purchase order or missing information.
- Task: The AP team coordinates with approvers, vendors, or purchasing departments to address exceptions and discrepancies.
- Outcome: Exceptions are resolved, and invoices are corrected or escalated as necessary.
7. Final Approval and Payment Scheduling
- Action: After final approval, invoices are marked for payment.
- Task: The AP system schedules payments based on due dates, taking into account early payment discounts or payment terms.
- Outcome: Invoices are ready for payment execution.
8. Payment Execution
- Action: Execute payments through the chosen method (e.g., ACH, wire transfer, check).
- Task: Payments are processed in the AP system, and remittance advice is sent to vendors.
- Outcome: Vendors are paid, and payments are recorded in the accounting system.
9. Record Keeping and Reconciliation
- Action: Store approved invoices with EasyInvoiceManager and payment records securely for audit purposes.
- Task: Reconcile paid invoices with bank statements and internal records to ensure accuracy.
- Outcome: Reconciled accounts payable records, ensuring all payments are accounted for correctly.
10. Reporting and Analysis
- Action: Generate reports on invoice processing times, payment status, and exception rates.
- Task: Use reports for internal review, performance analysis, and process improvement.
- Outcome: Insights into the efficiency of the AP process and areas for potential improvement.
This structured workflow helps streamline the accounts payable invoice approval process, minimizes errors, and ensures timely payments to vendors—ultimately leading to better supplier relationships and enhanced financial control.