Traditional invoice approval processes often rely on legacy systems and manual steps that can create significant challenges. First, these systems tend to be slow, as invoices are routed manually for approval, leading to delays and bottlenecks. This can result in late payments, strained vendor relationships, and potential penalties. Additionally, the manual nature of these processes increases the risk of human error, such as incorrect data entry or lost paperwork, which can complicate the approval process further.
Another challenge is the lack of visibility and control. Legacy systems often do not provide real-time tracking of invoice status, making it difficult for finance teams to monitor progress or address issues promptly. This lack of transparency can lead to missed approvals, duplicate payments, and difficulties during audits.
Cloud-based invoice approval software offers a solution to these challenges. By automating and streamlining the approval process, it reduces the time and effort required to manage invoices.
Read on to learn more about the advantages of cloud-based invoice approval.
What Does Cloud-Based Invoice Approval Mean?
Invoice approval is the process of checking, approving, and paying invoices. The steps involved can vary based on a company’s financial process, accounts payable operations, and the type of goods or services being purchased.
In a manual process, AP teams must email or hand-deliver invoices to the relevant stakeholders for approval. They then need to keep track of each invoice to ensure it’s reviewed and approved before the payment deadline.
Cloud-based invoice approval simplifies this by automating the process. Instead of handling paper invoices, AP teams use a digital workflow to manage payments in real-time and gain better visibility into budgets.
5 Advantages of Cloud-Based Invoice Approval
Switching to a paperless approval workflow can greatly enhance accounts payable processes, making them more efficient, productive, and accurate. By using a cloud-based invoice approval workflow, businesses can enjoy several key benefits, such as:
1. Accurately capturing and keying in invoice data
When an invoice is submitted, it can come from a vendor or an employee. The invoices are in different formats as well, including PDFs, Word documents, or direct entries through a web portal. Most cloud-based solutions offer flexibility ensuring that you can upload invoices in the format that suits you best.
Once the invoice is submitted, the software uses Optical Character Recognition (OCR) and other data extraction tools to read and pull out essential details. This includes the vendor’s name, invoice number, date of the invoice, and the amount that needs to be paid.
Advanced solutions even offer AI-powered data extraction which can capture and key in unstructured data, custom fields, and multi-language invoices.
By automatically extracting this information, the cloud-based solution reduces the need for manual data entry, saving time and minimizing errors. This streamlined process helps ensure that all necessary details are captured accurately and efficiently, making invoice management much easier.
2. Detect overpayments, underdeliveries, and fraud with 3-way matching
The cloud-based invoice approval solution compares the purchase order, receipt note, and supplier invoice to ensure consistency. Three-way matching helps identify discrepancies by aligning quantities, prices, and order details across these documents.Â
Overpayments are flagged if the invoiced amount exceeds what was received, while under-deliveries are caught if the received goods don’t match the order. Fraudulent activities, such as inflated invoices or terms of payment mismatch, are also detected when documents don’t align.
Peakflo’s OCR technology and AI-powered smart matching streamline the 3-way matching process. It identifies discrepancies or mismatches instantly and flags them for review. Invoice approvers can check the violations and take swift action.
3. Automated approval routing based on predefined rules
Automated invoice approval routing based on predefined rules streamlines the approval process by directing invoices to the appropriate approvers without manual intervention. This approach uses a set of predefined rules, such as invoice amount, department, vendor, or project code, to determine the approval path.
For example, an invoice over a certain amount might require approval from a senior manager, while smaller amounts might be routed to a department head.
It frees up time for finance teams to focus on more strategic tasks, as they no longer need to chase down approvals or manually track the status of invoices.
With Peakflo, companies can set unlimited approval levels, ensuring that the right people are involved in the approval process. Whether it’s team members, department heads, or C-level executives, approval routing can be customized to match the organization’s hierarchy.
Also, if the primary approver is unavailable, the system automatically escalates the approval to a designated fallback approver. This prevents delays and ensures a smooth, frictionless approval process.
4. Review and approve invoices anywhere, anytime
A cloud-based invoice approval solution streamlines the review and approval process by enabling approvers to access invoices from anywhere, at any time. With automated notifications, approvers are instantly alerted when an invoice requires their attention, reducing delays and ensuring timely payments.
The ability to review invoice details online allows approvers to quickly verify the accuracy of charges, confirm receipt of goods or services, and ensure compliance with budgetary constraints. This real-time accessibility fosters collaboration, as approvers can easily communicate issues, reject inaccurate invoices, or request corrections without the need for back-and-forth emails or paper trails.
Moreover, the approval process becomes as simple as a single click, minimizing administrative burdens and reducing the risk of errors. By centralizing the approval workflow in a secure, cloud-based environment, businesses can enhance efficiency, maintain control over spending, and accelerate the overall invoice processing cycle.
5. Track and follow up on approvals
A cloud-based invoice approval solution provides real-time visibility into the status of every invoice, ensuring that finance teams are always aware of where each invoice stands in the approval process. This transparency reduces the risk of invoices getting lost or delayed.
Moreover, cloud-based platforms facilitate seamless communication among team members, allowing for efficient collaboration across departments. This centralized communication system ensures that everyone involved in the approval process is on the same page, reducing the likelihood of miscommunication and errors.
Peakflo’s Timeline allows you to tag co-workers, ask questions, and keep all stakeholders informed in one place. This centralized approach ensures a clear audit trail, making it easier to monitor progress and follow up on pending approvals, enhancing efficiency and accountability.
Closing Thoughts
Cloud-based invoice approval transforms traditional, manual processes into efficient, error-free workflows that enhance overall financial management. By automating data capture, detection, routing, and real-time tracking, your business benefits from greater accuracy, speed, and control. This shift not only streamlines invoice processing but also strengthens vendor relationships and compliance.
Peakflo offers a robust cloud-based solution that integrates seamlessly with your existing systems, revolutionizing your AP processes. It enhances efficiency by enabling real-time approvals, reducing manual errors, and providing seamless access from anywhere. The system integrates advanced features like AI-powered validation and customizable workflows, ensuring faster processing and improved accuracy.
