The importance of invoice approval workflows

US businesses lost nearly $2 billion in invoice fraud in 2020 alone. Scammers take advantage of manual invoice processing, leaving finance teams in the lurch. Learn more about what an invoice approval workflow is and how AP automation streamlines and secures that process.

Heightened awareness of business email compromise (BEC) fraud soared during 2020; a trend that has carried over into 2021. The effects of not having a sustainable invoice workflow impact businesses of all sizes, and the FBI has urged US businesses to take precautions around invoice approvals. Even if you already have an established workflow in place, now is the time to audit and affirm that invoices are being reviewed before payments are made with a keen consideration for introducing AP automation that improves delays introduced in a manual approval process.

What is an invoice approval workflow?

Ideally, when an invoice is received, all of the information will be accurate and payments will be processed in a timely manner. And many, if not most, invoices that come into an accounting department are just that—error free and ready to be reconciled. However, the regrettable reality of scammers and misplaced numbers means that processing invoices takes more than just a quick glance.

Invoice approval workflow is a process that a company undertakes to ensure that AP is paying the correct amount—to the correct vendor—at the correct time. As a series of steps or checks that an invoice undergoes before payment is sent, the workflow becomes a risk reduction system that supports sustainable vendor relationships as well as transparent, proactive bookkeeping.

Explaining the invoice approval workflow

Verify the invoice

Once an invoice has been received, a number of pieces of information on the invoice should be reviewed. What exactly those touch points are will vary depending on the size of a project or frequency of vendor interaction, however, they should always include: vendor name and contact, invoice amount, line items including unit cost, quantity and subtotal, invoice number or PO number, payee data including payment type and relevant routing information, and any relevant due dates including rebate windows.

Businesses refer to this verification as a two- or three-way invoice matching because the invoice is compared to a purchase order, a packing slip or delivery confirmation, and sometimes a purchase requisition.

Define any exceptions

Where a piece of data from the invoice does not match, more information must be gathered. Sometimes this is just a matter of contacting a vendor's AR department and requesting that the information be corrected. However, where there is pushback, further action may need to be taken including involving executive level stakeholders to resolve the issues.

Get necessary approvals

Once the information on the invoice has been corrected and is verified, the invoice is approved. Who determines the approval should be clearly defined: Smaller amounts may have pre-authorization for defined business needs whereas larger amounts may require the approval of a manager or executive team member.

Invoice payment

With the invoice verified and the amount to be paid approved by the appropriate party, the amount due to the vendor can be processed. Good business practice encourages communication to the vendor that a payment is in process with an estimated lead time.

Why is invoice approval important?

An invoice approval workflow can feel arduous; busywork intended to keep employees on task throughout their day. But while these checks and balances may feel bothersome, they are critical to healthy business practices.

No missed or incorrect payments

Simply put, invoice errors cost your business financially. Invoices that are not correct can result in under- or overpayment. Underpayments lead to late fees and loss of anticipated early payment discounts. Overpayments are difficult to recover. Some vendors may respond in a helpful way while others may prefer to offer future credit to future purchases. Careful review and approval for invoices means that payments are made on time.

Catch errors from manual data entry

Manual errors don’t just impact the financial department. They also create discrepancies in inventory, throw off reconciliation, and create space for distrust between businesses and the suppliers they rely on. Identifying these errors before time or money is lost protects financial teams and procurement in the short term as well as preventing impact to even sales or operations teams in the long term.

Prevent fraud

Scammers design their techniques around business vulnerabilities. Externally, fraud looks like intentionally duplicated or fake invoices, unapproved payment terms, vendor impersonation, even invoices for products or services that have not been completed. Further, as much as we know we can place trust on forthright employees, cash skimming and shell companies are an unfortunate reality. Without invoice reviews and approval hierarchies, sneaky fraud tactics can slip past even the most cautious AP team or CFO.

Common issues with manual invoice approval

While having an invoice workflow process in place is vital to reducing inaccurate payments and fraud, finance departments traditionally conduct these processes manually. Unfortunately, where there is manual labor conducted, unavoidable bottlenecks and unintentional oversight occur.

Mistakes with manual entry & fraud vulnerability

Human error is inevitable. Even the most experienced bookkeeper can transpose a number here or there. And while established AR/AP relationships with long-term vendors elicit quick and amicable resolutions, more often than not these corrections can take time and delay payment resulting in late payments and fees.

While manual entry errors are a simple enough fix, the errors that are intentionally introduced can be more difficult to pinpoint and correct. BEC scams rely on the fact that AP teams are busy with multitudes of invoices and may overlook seemingly minor details. An email address with a slightly different spelling, an invoice with total amounts that are very near to, but do not go over, pre-approved amounts, an increase in invoices from a regularly used vendor. These are all tactics used by scammers that are easily missed in a manual invoice approval process.

Slow approval process & lack of visibility

Having each part of the invoice approval process in the hands of manual labor means it takes time. This is perfectly reasonable considering that unknown variables interrupt day-to-day business. Just one person in the approval chain who misses an important email can create a domino effect that delays payments for days, even weeks.

With processes that take longer, keeping all of the key players in the loop can be difficult. Email chains get bogged down and eventually ignored if the issue is exacerbated enough. In manual systems where employees lack the ability to check in on approval progress, further email communications are sent, exponentially increasing the slog of email threads that go nowhere.

How automation improves the invoice approval workflow

Establishing necessary checks and balances to protect business finances doesn’t have to come at the cost of time delays and labor. AP automation irons out those less than desirable barriers to seamless invoice approval workflows.

  1. Central location to manage all invoices. Invoices come in all shapes and sizes, both hardcopy and digital. Having a system that can scan and input data into consistent formatting and centralized in one system means accessing and reviewing invoices doesn’t involve shuffling through stacks of paper or staring at a spreadsheet.

  2. Integrations with accounting tools. AP automation integrates with accounting tools your business already uses. This means that financial teams have access to real-time reconciliation and that an audit trail isn’t a time-consuming process.

  3. View information about vendors in one location. Time freed up from manual input means that employees can engage in strategic tasks. AP solutions put information about vendors into one location, meaning that the right vendor can be selected to fulfill projects.

  4. Centralized method for vendors to send invoice. Establishing a primary point of contact for vendors can make all the difference to successful AP cycles. Vendors know where to send invoices without guessing or sending digital data to dead end email inboxes.

  5. Set notifications & reminders for invoice approvals. AP automation provides customization for approval workflows. Rather than long email threads where important details are lost, reminders and update emails are automatically sent, giving stakeholders access to approval progress and streamlining the approval workflow.

Improve invoice payments with Routable

Process invoices with Routable and lean into the ease of AP automation.

  1. Automatically forward bills from your email. Routable users are able to receive invoices from vendors in myriad ways including forwarding digital invoices directly to the system to capture important AP data.

  2. Customize your approver rules. Not all stakeholders are the same. Routable lets you create an approval profile for each person in the workflow, customizing their involvement so the right person is notified at the right time.

  3. Automatically update your accounting software. Two-way syncing with Routable ensures that the invoices you are receiving are processed through your accounting software in real time.


According to the FBI, the most common type of BEC fraud is through invoices and payments which cost US businesses nearly $2 billion in 2020 alone. There is no better time to implement AP automation. Contact Routable today to learn more about how AP automation can save your business valuable time and resources, streamlining payable processes, and securing sustainable and safe invoice approval workflow practices.


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