How Invoice Authorisation Can Benefit Your Business

Authorising invoices can be a very time consuming and costly job for the accounts payable department

. Invoices that are received without an associated purchase order need to be manually approved for payment. In a manual system, the process typically involves the accounts payable (AP) department posting the invoice to the authoriser (via internal or external mail), who manually authorises the invoice by annotating the original and returning it to the accounts payable department. This is not necessarily the most ideal way to authorise an invoice, as the accounts payable team lose control of the process once the invoice has left the department, and as a result can spend time and effort chasing invoices and dealing with late payment queries from suppliers.

The Aberdeen Group estimate that 59% of invoices that arrive at accounts payable departments are in paper format, and without an automated authorisation solution, this can become a very labour intensive and expensive job. The authorisation process is an area where huge improvements in productivity can be made by taking advantage of automation technologies such as Invoice Management Solution (IMS).

Rather than sending copies of each invoice to authorisers and keeping a manual check on the payment dates, IMS automates the entire process. Business rules are embedded in the system so that each invoice can be automatically forwarded to the correct recipients. Web technology allows the authoriser to view the invoice and complete the authorisation regardless of their location. The system includes a full audit trail and workflow history as well as an integrated escalation procedure to ensure that the invoices are authorised and paid on time. This will have a positive impact on supplier relations and ensures that the department receives its supplier discounts every time.

Other benefits of automating the authorisation process include:

Improved speed of the invoice approval process

Improved compliance - authorisation in line with company sign off limits as well as legislation such as Sarbanes Oxley and BIP0008

Reduced authorisation costs

A paper-free authorisation process

Removal of manual distribution of invoices

Greater control over a key business process

Improved supplier relationships

Some Invoice Processing Solutions contain a module that can authorise invoices, which can automate the invoice approval process by:Providing facilities for AP to easily select the correct user to authorise the invoiceOffering a web based interface to allow end users to authorise invoices onlineProviding the ability for end users to view the invoice image and details onlineProviding facilities for the authoriser to reject, hold or forward invoicesAutomatically routing the invoice through a series of hierarchical authorisersProviding automated escalation based on specific business rulesAutomatically posting the authorised invoice (header, footer and line data) to the financial system Providing a complete workflow history and audit trail for each invoiceProviding an online status for each invoice to assist AP with query handling Investing in a solution that will automate the authorisation process can be very beneficial for an organisation in terms of cost and efficiency gains, as well as enabling AP staff to become more productive and concentrate on more strategic tasks. by: Documation

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