Ever find yourself chasing approvals, re-entering invoice data, or dealing with surprise errors when it’s already too late?
Manual invoice handling can quickly eat up your team’s time, inflate costs, and put supplier relationships at risk.
In this guide, we’ll walk you through a step-by-step invoice approval workflow that covers everything from the basics of manual vs. automated processes to common bottlenecks and how to overcome them.
Whether your goal is to cut costs, prevent mistakes, or simply keep your suppliers happy, you’ll find practical tips and clear explanations to help you streamline your entire accounts payable process.
What is an Invoice Approval Workflow?
An invoice approval workflow is a structured set of steps that takes an invoice from the moment it’s received to the final payment.
This process helps ensure that each invoice is:
Accurate
Complies with company policies
Gets paid on time.
What Steps Are Included in an Invoice Approval Process?
An invoice approval workflow typically follows these steps:
An invoice arrives - either by email, mail or through an automated system.
The invoice details (like amounts, supplier information, and product descriptions) are verified.
The invoice is routed to the right people for approval.
Once approved, your accounts payable team proceeds with payment.
We’ll dive into these steps in more detail later in this article.
Manual vs. Automated Invoice Approval Workflow
Manual Workflow: In a manual workflow, invoices are often handled physically - printed, signed, and passed along from desk to desk. While this method might be familiar, it can be time-consuming, prone to errors, and challenging to track.
Automated Workflow: When you use invoice approval workflow software, the entire process moves faster and more smoothly. Invoices are automatically scanned, verified, and forwarded to the right person for sign-off - no paper chase required. Automation reduces the risk of human error, speeds up approvals, and offers real-time visibility into where each invoice stands.
When you compare manual to automated methods, you can see why more businesses are turning to invoice approval workflow solutions.
The modern, automated approach saves time, cuts costs, and makes sure nothing slips through the cracks.
Why An Efficient Invoice Approval Workflow Matters
Building an efficient invoice approval workflow goes beyond simply paying bills on time.
It helps prevent financial errors, streamline your payment process, and nurture strong supplier relationships.
Here are four key reasons why:
1. Financial Accuracy
When invoices are carefully checked before payment, you’re much less likely to make overpayments or fall for duplicate invoices or fraud.
A structured AP invoice approval workflow makes it easy to catch any errors early and maintain trustworthy financial records.
2. Cost Savings
An efficient invoice approval workflow can trim labour costs, reduce late fees, and even help you grab early payment discounts.
If you use invoice approval workflow software, you’ll automate many time-consuming tasks, letting your team focus on work that adds real value.
3. Stronger Supplier Relationships
Paying your suppliers on time shows you respect their services - and that goes a long way toward building trust.
A streamlined workflow keeps everyone on the same page and avoids payment delays, so suppliers feel confident about working with you in the long run.
4. Compliance and Visibility
A clear, step-by-step approval process ensures that every invoice is properly authorised and easy to track.
That transparency helps you stay compliant with regulations and company policies while giving you a clear audit trail whenever you need it.
Typical Steps in an Invoice Approval Workflow
A well-organised invoice approval workflow usually follows a handful of clear, repeatable steps.
Here’s a breakdown of those steps:
1. Invoice Receipt
You’ll receive invoices in various formats - some might arrive in your inbox as PDFs, while others could still come through the mail.
The first step is logging each invoice, whether it’s digital or paper-based, so nothing slips through the cracks.
2. Data Capture/Entry
Next, you’ll want to verify key details like:
Supplier names
Invoice dates
Amounts
This ensures that the information matches your records, preventing costly mistakes.
Automation tools, like ExpenseIn’s invoice approval software, can do most of this heavy lifting for you.
3. Matching and Validation
Once you have all the data, it’s time to compare the invoice against supporting documents:
Purchase orders
Contracts
Delivery receipts
This is known as 2-way or 3-way matching and helps you catch any discrepancies quickly.
4. Approval Routing
If everything checks out, the invoice heads to the right people for sign-off.
This could mean department managers, finance leads, or even multiple approvers, depending on your company’s policies and the invoice amount.
An AP invoice approval workflow that’s automated can route invoices instantly, speeding up the entire process.
5. Payment Processing
Finally, once the invoice is approved, it’s scheduled for payment.
You can choose to pay immediately, hold off for better cash flow, or aim for early payment discounts.
Pro Tip: By using ExpenseIn’s invoice approval software, you can automate nearly every step - including pre-approval for upcoming spending. From quick data capture to painless routing, the entire process runs more smoothly, with fewer human errors or delays. This modern approach transforms your invoice approval workflow into a quick, efficient system that benefits both your team and your suppliers.
Challenges & Bottlenecks in Manual Invoice Approval
Relying on a manual invoice approval workflow can quickly create problems for your team and hurt your bottom line.
From sorting through paper invoices to waiting on physical signatures, these outdated practices often lead businesses to consider automated solutions to help them stay competitive.
Here are the top challenges you might face when sticking with a manual AP invoice approval workflow:
1. Slow Turnaround and Delayed Approvals
Passing paper invoices around for signatures, waiting on mail delivery, and chasing approvers adds unnecessary lag.
These delays can snowball into late payments, frustrated suppliers, and potential damage to your business reputation.
2. Increased Error Rates
Manually entering numbers, dates, and supplier details leaves a lot of room for mistakes.
Whether documents get misplaced or data is misread, errors can wreak havoc on your accounts payable process.
3. Fraud Risks
With fewer built-in checks and balances, a manual system is more susceptible to unauthorised or duplicate payments.
A fully automated workflow often includes multiple validation steps, reducing the risk of fraud.
4. High Costs
Manual handling of invoices is both time-consuming and labour-intensive.
Printing, filing, and routing costs add up, making this approach expensive in the long run.
5. Lack of Visibility
When invoices are shuttled around in paper form, it’s tough to know where they are at any given moment.
Limited reporting features also make it harder to spot trends, track approvals, or forecast cash flow accurately.
How Invoice Approval Workflow Software Solves These Issues
Switching from a manual setup to invoice approval workflow software - like ExpenseIn - tackles the common roadblocks that slow down traditional methods, helping you save time, reduce errors, and stay on top of spending.
Here’s how:
1. Real-Time Scanning and Data Capture
Automated OCR (Optical Character Recognition) removes the error risks of typing in invoice details by hand.
For example, ExpenseIn’s scanning feature instantly captures all the key data you need, cutting down on mistakes and freeing up your team for more important work.
2. Advanced Approval Flows
Multi-tiered approvals let you guide invoices directly to the right decision-makers.
With AP invoice approval workflow features, you can easily handle out-of-office requests or reroute approvals whenever someone is unavailable, keeping the process moving smoothly.
3. Purchase Requests & Pre-Approvals
Want to keep better tabs on spending before it happens? With invoice approval workflow software, you can request and approve budgets in advance.
This clear purchase-to-pay cycle ensures you always know where your money is going.
4. Categorisation and Coding
Instead of manually sorting invoices into various ledgers or projects, automated categorisation does the job for you.
This eliminates guesswork and ensures that every invoice is accurately assigned, so your financial records stay organised.
5. Supplier Policies & Auto-Approvals
For trusted suppliers you work with regularly, set up auto-approvals or tailored policies to skip unnecessary steps.
By customising thresholds per vendor, you streamline approvals for reliable partners and only focus on the exceptions.
6. Smart Reporting and Dashboards
Gain a bird’s-eye view of all your invoices, spending trends, and any roadblocks in real time.
Having on-demand data at your fingertips makes it easier to plan cash flow, spot potential issues, and keep your invoice approval workflow running at top speed.
Ready to Streamline Your Invoice Approval Workflow?
Throughout this article, we’ve seen how a well-structured invoice approval workflow can eliminate bottlenecks, minimise errors, and keep your suppliers happy.
If you’re looking to replace paperwork headaches with a faster, more reliable system, ExpenseIn can help.
Want to see how it works?
Book a free demo today, and we’ll show you exactly how our software speeds up invoice approvals, reduces costs, and keeps your team focused on running a successful business.
