Automated invoice approval: how to set up workflows based on responsibilities, amounts, and document types

An incoming invoice may be factually correct and ready for accounting, yet it still sits waiting for approval for days. The reason is often not the document review itself, but the way the company manages its flow between the people responsible.

With a growing number of invoices, cost centers, and approvers, simply moving approval from paper to an electronic format is no longer enough. The approval workflow must be able to distinguish who should approve a specific document, according to what rules, in what order, and when an invoice can proceed without further manual intervention.

The approval process must be based on company responsibilities

The same approval procedure does not make sense for all incoming invoices. An overhead expense of a few thousand crowns has a different significance than a large investment invoice or a document whose items fall under several departments.

Workflows can therefore be set up based on factors such as invoice type, value, or the hierarchy of approvers. The system then routes the invoice between the responsible people according to the defined procedure. If an invoice exceeds a set amount, an additional approver can be automatically added to the process. Conversely, for recurring invoices that meet pre-set parameters, it is not necessary to repeat the entire approval process for every document.

Approval logic is therefore not dependent on who happens to pick up the invoice or who remembers to pass it on. It is part of the process configuration.

Automatic approval makes sense where decisions can be translated into rules

Manual approval is meaningful where a responsible person must truly assess the accuracy or legitimacy of an expense. However, for some documents, the approval outcome is predictable based on pre-established conditions.

Typical examples include regularly recurring invoices. If their parameters fall within specified limits, the system can skip the approval step and move the document to the next processing stage.

Automation is not just about passing invoices between people faster. Part of the decision-making logic is transferred directly into the workflow, and people only enter the process where their judgment is truly required.

Control and traceability remain an integral part of the process. iNVOiCE FLOW, a tool for automating incoming invoice processing from GRiTu can work with extracted data before approval, check for discrepancies, and, depending on the settings, compare the invoice against a purchase order, contract, or process rules. At the same time, you can track the status of each document, see who approved it, and view the steps it has gone through.

If an invoice does not meet the specified conditions, it can be returned for completion or further resolution before it is posted.

How different approval models work in practice

Douglas Perfumeries uses separate workflows for overhead and merchandise invoices. For recurring documents, parameters are set with the first invoice. If subsequent documents meet these criteria, the approval step is skipped, and the invoice proceeds directly to posting. Conversely, for overhead invoices exceeding a set value, the CEO is automatically added to the process. After implementing iNVOiCE FLOW and a clear workflow, the number of inquiries regarding documents dropped tenfold, and the number of invoices paid past their due date decreased by 75%.

JABLOTRON ALARMS uses up to a four-level approval process. The number of approvers changes based on the document type or its total amount. For complex invoices, individual parts can also be split among different departments. The company processes approximately one thousand incoming invoices per month and has reduced the time required for their approval from several days or a week to just a few hours.

At 3E PROJEKT approval is set up before the actual posting. The responsible person first determines where the cost belongs and approves the invoice. The accountant then only works with documents that have already passed this step. This way, incorrect documents can be filtered out before they are entered into the accounting system.

The workflow must manage the entire invoice lifecycle

When designing an approval process, it is necessary to determine how approvers are assigned, when an additional level of approval is added, which documents can pass automatically, and how discrepancies are handled.

iNVOiCE FLOW translates these rules into an electronic workflow, routes invoices to the responsible individuals, and, once approved, can transfer the data to your accounting or ERP system. The finance department thus has continuous visibility into which invoices are approved, which are awaiting a decision, and the current stage of each liability in the process.

Set up approvals according to your company's processes

iNVOiCE FLOW allows you to manage the approval of incoming invoices based on your company structure, document type, and defined rules. From automatic approver assignment and multi-level workflows to the automatic approval of selected invoices.

See how iNVOiCE FLOW can be integrated into your company's invoice processing.