Hundreds of AP (accounts payable) professionals spend at least 20% of their work time managing approvals. That's one full day a week! How can organizations expect their accounting teams to deliver on strategic priorities when they’re spending all their time performing such mundane tasks? The answer: they can’t. But there is a better way!
If you’re nodding along in frustration –– perhaps all too familiar to you or your team –– then read on. In this blog, we’ll explore the AP best practices accounting teams must adopt to modernize the approval process and make better use of your team’s time.
How we got here
In many organizations, AP approval workflows are poorly defined and inadequately managed. There’s rarely any single thing to blame –– it’s often because organizations simply don’t have the time or the budget to invest in automated solutions. But this lack of automation can lead to much more serious issues, including an increase in fraud and the risk of manual errors like overpayments or duplicate payments.
What many organizations don’t realize is that with a simple, AP automation solution like Quadient AP, they could set their teams up for success and empower them to not only eliminate tedious manual workflows, but better protect their company’s bottom line.
The benefits of AP automation
Quadient’s AP automation solution offers numerous benefits, including:
- Time savings
- Cost savings
- Improved collaboration
- Reduced risk
And of course, there are all the additional improvements to the workflows themselves, such as customizable processes and improved visibility into every step the team members take. One specific example where an automated AP solution can have an immediate and positive impact is in the AP approval workflow.
Approval channel best practices
Approval channels are rules used to designate invoices, purchase orders, expenses, and payments to managers or team leaders for approval. But when an AP workflow is manual, these sometimes break down and lead to manual errors. Even more dangerously, these workflows can be tampered with or falsified, leading to an increase in fraud.
Organizations can use Quadient AP to set up the following approval channel best practices:
- Create multi-level approvals: Set up at least two levels of approval. For example: Invoices over a certain amount must be signed off on by at least two people.
- Separate approvals for invoices and payments: The person who approves invoices should not be the same person who approves payments. This double verification will help prevent risk, flag fraudulent activities, and protect company funds.
- Create formalized approval procedures: Formalize and document your approval procedures. They should clearly define the approver, the timeline for approval, the back-up approver, and the second-level approver (as applicable) for every workflow.
- Segregate duties: GAAP (Generally Accepted Accounting Principles) recommends making sure that the individuals who create and maintain financial records for an organization's transactions should not be the same people as those who issue and approve the financial transactions.
- Build a PO (purchase order) approval workflow: Set up internal purchasing rules before placing orders. Make sure that POs are authorized by managers or finance department leads, approved, and then sent to the supplier.
Approval channel automation
Quadient AP can help you create customized approval channels based on your unique, organizational requirements. It also has the flexibility to create separate approval workflows for all your accounting processes –– from purchase orders, to invoices, to payments, with distinct levels and approvals for each one.
In addition to the obvious time-savings benefits, approval channel automation provides:
- Restricted access: Only authorized approvers can view the status and history of a purchase order and sign off on an invoice or payment.
- Customized routing: Create separate approval routes for invoices based on location, department, project, vendor, etc.
- Cloud-based audit trails: Track and trace every step of an invoice workflow electronically, creating an indisputable and easy-to-access audit trail.
Choosing a robust AP automation solution
The bottom line of every business is integral to its success. It’s important to set your accounting teams up for success with automated approval process management, to help you eliminate inefficiencies, focus your team on strategic work, and safeguard your budget.
When you’re ready to invest in Quadient AP to automate your AP approval workflows, we're here to help. Book a demo today!
