In an era of digitalisation, the management of supplier invoices has undergone numerous transformations. Among them, one of the most important, but also one of the most overlooked, is undoubtedly the automation of the invoice approval process.
Approving accounting documents, especially in the case of supplier invoices, is an optional task of which the importance is sometimes underestimated. However, it has many benefits for the company and its business processes.
Firstly, invoice approval helps guard against the risk of errors. For example, a typo or a misplaced comma can distort the price of a product or service. A small oversight that can have serious consequences...
Indeed, accepting an invoice of a higher amount than expected could harm your relationships with your suppliers. Conversely, they will be grateful if you immediately inform them of an error in one of their documents.
Approval also helps combat fraud because this control process prevents any modification of the invoice, giving it a definitive character. Therefore, it is an essential step in ensuring the accuracy of the information contained in the document before its final validation.
Supplier invoice approval generally occurs in three stages: verification, recording and payment.
This step involves verifying that all mandatory information is present on the document and that it is accurate, including:
· Invoice issuance date
· Payment deadline
· Invoice number
· Supplier and customer contact information
· Description of each product or service sold
· Unit price
· Total amount to be paid
· Applicable VAT rate
· Late payment penalties
In the absence of one or more mandatory details, the accounting document may be deemed non-compliant. The supplier must then be informed and they will need to reissue it. If all mandatory details are on the invoice, it is considered compliant and the "ready to pay" mention can be affixed to it.
Note: To ensure the document's authenticity and that the invoiced products, prices and quantities are correct, the invoice is generally compared with the previously signed purchase order.
After confirming the authenticity and completeness of the invoice, it must be recorded in the company's invoicing software. This allows the document's status to be tracked in real-time, from receipt to payment. Paper invoices, on the other hand, must be stamped.
After recording the accounting document, final validation can take place. Any modification becomes impossible at this point, highlighting the importance of ensuring there are no errors. It can then be forwarded to the accounting department for payment.
When an invoice is forwarded to the accounting department, it is their responsibility to pay it by the indicated deadline. However, it is only truly accounted for on the day of payment. This is important because late payments can have adverse effects on supplier relationships, potentially resulting in penalties.
An invoice approval process is a workflow that facilitates the circulation and modification of data exchanged in the approval of accounting documents. Implementing e-invoicing within this process can further streamline approvals by automating data exchange and improving accuracy and efficiency.
In concrete terms, it involves defining a certain number of stages, which can vary depending on the company's size.
Furthermore, each of these stages must be assigned to a specific person, whether it's an accountant, the CFO, an administrative manager, the CEO... Nobody else should be able to access the relevant information through the approval management software, if not confirmed by the company.
To create an invoice validation process, various factors must be considered:
· The number of suppliers
· The number of invoices processed each month
· The individuals involved in document validation
· The software used for accounting, as well as for payment management
From there, it is possible to define the different stages of the workflow, with the idea being to keep it as simple as possible. Focus on essentials by eliminating unnecessary steps and defining strict rules for validating accounting documents.
Invoice processing remains a major challenge for some companies in 2024, as they cope with more frequent payment delays.
Validating supplier invoices manually is a time-consuming and complex set of tasks with relatively low added value. Fortunately, it is possible to automate this process to save time, money and increase company productivity by allowing your employees to focus on more profitable tasks.
With an accounts payable automation solution, through an automated approval workflow, each accounting document has a common entry point: through automatic collection, you no longer need to chase scattered documents. After collection, Optical Character Recognition (OCR) instantly extracts the data they contain. Then, smart data extraction technology basically “reads” each document. It can understand and process the text from the OCR and transform it into relevant data. Centralised within the same tool, invoices are much easier to manage and validate, allowing you to master the purchase and sales cycle from A to Z.
This type of software also allows you to customise your invoice approval processes by assigning roles and defining rules for each stage. Not to mention integration possibilities with ERPs and other accounting software, to ensure data consistency throughout the information system.
By creating an automated invoice approval process, the company frees itself from a time-consuming and complex task that previously required considerable effort for relatively little added value.
In the financial management sector, Yooz stands out as the first choice for automating the P2P process. With an innovative platform, Yooz revolutionises the approval process by making it fast, efficient and error-free. Its advanced features, including intelligent digitalisation and collaborative workflows, ensure optimal visibility at every stage of the financial process. The user-friendly aspect and customisation of the solution facilitate its integration, adapting easily to the specific needs of each company. Placing data security at the forefront of its priorities, Yooz guarantees unparalleled protection.
Choose Yooz to optimise your productivity, reduce errors and ensure compliance, simplifying and optimising your supplier invoice validation process. Ask for a demo here: