The Complete Guide to Invoice Approval Workflow (2024)


Whether you are in the services industry or the manufacturing industry, managing invoices and keeping an eye on the payables is an important part to having successful relationships with suppliers.

An automated and digitized invoice approval workflow can help companies achieve transparency, maintain timely payment cycles, and avoid any discrepancies that might arise due to manual invoicing processes.

What is an invoice approval workflow?

An invoice approval workflow is a series of steps that need to be followed to clear the invoice. It acts as a checklist to ensure there are no discrepancies, and the invoice is cleared swiftly.

An invoice approval includes reviewing and approving invoices before the payment is processed against them. Usually, the invoice approval process starts when the company receives a supplier invoice, which is then checked by the person in the organization who is responsible for buying that particular product or service. After verifying the invoice details, it is then forwarded to the accounting department.

While small businesses might have a single person handle all of the invoices, enterprises usually have a big accounting department to take care of the invoicing process.

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What does an invoice approval workflow look like?

While the exact invoice approval workflow can differ a lot, it usually includes the following steps:

1. Verify the invoice

The first step is verifying the received invoice, which includes validating it against other purchase-related documents like purchase requests, purchase orders, and order receipts.

2. Define any exceptions

In case the invoice fails the verification process because of any missing information or discrepancy, then it should be forwarded to the relevant people that can fix the errors so that the invoice can be sent through the approval process again.

3. Get necessary approvals

Once the invoice has been thoroughly verified and validated, and there are no discrepancies in it, it can be sent for approval to the relevant personnel.

4. Invoice payment

With the final approval received for the invoice, the last step is to forward it to the finance and accounting department to process the payment and close the invoice.

The challenges with manual invoice approval workflow process

A manual invoice approval workflow process may seem like a good way to start. But it can quickly become a time-consuming process as the number of invoices increase, which can, in turn, makes it difficult for your team to keep up and process invoices on time.

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Here are some of the many challenges of manual invoice workflows:

Mistakes with manual entry

No matter how reliable your team members are, human errors can never be fully avoided. Discrepancies can lead to overpaid invoices, underpaid invoices, and numerous other problems which can cause financial troubles for the company in the long run.

Not to mention, manual data entry takes time away from your employees, that could have been spent doing something more productive.

Slow approval process

Manual invoice approvals are time-consuming and can lead to delays in payments that can, in turn, affect the relationships with your suppliers. After all, when suppliers are sending products or services on time, it can be frustrating for them to wait through long payment delays.

Lack of visibility

It can be difficult to track the status of the invoices if your organization is still following a manual invoice approval process. This can, in turn, make it difficult to provide suppliers and contractors with an estimated payment clearance time.

Vulnerability to fraud

Fraudulent billing is one of the biggest challenges faced by accounting departments. From invoices that don’t match the expenses to manually tampering invoices, fraud is a big problem when your organization is following a manual invoice approval process.

How does an e-procurement solution help manage invoice approval workflow?

Even if your organization is able to generate, send, and receive electronic purchase orders as well as invoices, if the rest of the business processes in the company are still weighed down by paper, then automating invoices wouldn’t help in a big way.

An e-procurement solution solves that very problem by eliminating paper processing in the entire procurement process. It helps streamline ordering and purchasing of goods as well as services. Right from placing an order to reviewing purchase orders to clearing invoices, it automates all the steps of the process.

With an e-procurement solution, you can quickly verify invoices against purchase orders, estimates, and other documents before directly forwarding it to the required approvers and the finance department.

Here are some of the many benefits of an e-procurement solution:

  • Better transparency as you can track all the orders and invoices through one platform
  • Automated invoice processing saves time and increases productivity
  • Lower transaction costs and better reporting of trends and metrics
  • Better supplier relationships as invoices are cleared at a faster rate
  • Reduces human dependency which leads to fewer errors

Kissflow can help automate invoice approval workflow

Kissflow procurement cloud that makes your organization’s procurement process simpler and smarter for you so that you can digitize all the functions in procurement and cut down on paper forms and overwhelming emails. From purchase requisitions to purchase orders, vendor management, and creating invoice approval workflows, Kissflow can handle everything for you.


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