What is an invoice approval workflow?
By Tim White · Glossary · Last updated
An invoice approval workflow is the path a bill takes from arrival to approved for payment: who checks it, who signs off and in what order. A good one gets each invoice to the right approver quickly, records the decision and doesn't make occasional approvers learn new software.
The usual steps
Capture the invoice, check it against the PO or contract, code it to an account, send it to the budget owner, record approve or reject, then release it for payment. Small businesses often fold several of these into one person and one afternoon a week.
Where it stalls
Almost always at the approval step. The approver is an owner or partner who lives in email, so the invoice waits for them to log in somewhere. Email approvals fix most of this: the approver clicks approve or reject in the message, and the decision is recorded on the invoice.
Approvals that happen in a hallway are the other problem. Six months later a vendor disputes a charge and nobody can say who agreed to it. Record every decision on the invoice, even when the yes was verbal.
Rules worth writing down
Set an amount above which approval is required, such as 1,000 dollars, and always require it for a new vendor or a changed bank account. Name a backup approver for when the owner is away, or bills wait a week.
Common questions
Do approvers need a login?
Not with email approvals. They approve or reject from the message.
Who should approve an invoice?
The person who owns the budget for that spend, usually a manager or the owner. Whoever enters the invoice shouldn't be the one approving it.
Sources
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