Invoice approval systems help accounts payable teams define and automate invoice reconciliation workflows, saving time and reducing errors in the process. These tools streamline workflows by:
- Centralizing and digitizing invoice capture to eliminate managing both electronic and physical invoices. This means no more duplicates or manual filing.
- Automatically matching new invoices with corresponding purchase orders and receipts.
- Flagging invoices with matching issues or other discrepancies so AP teams can troubleshoot promptly.
- Routing invoices to a manager or department lead for final approval.
- Pushing approved invoices to your accounting software or ERP system to prepare payments.
Besides saving time, these systems provide a plethora of benefits, helping teams work more productively and strategically, and improving overall cost savings.
To help you find the right invoice approval system, we’ve compiled this guide covering:
- The key features and benefits of invoice approval software
- How our system, ProcureDesk, supports and automates invoice management and approval workflows
- Alternative AP automation software to support invoice processing
Key Benefits & Features of Invoice Approval Software
Any high-quality invoice approval system should:
- Reduce invoice processing times. On average, most of our clients see a <30% reduction in time spent processing invoices within the first month of implementation. This is primarily because accounts payable departments no longer have to enter invoice data and match them to purchase orders manually.
- Improve compliance & minimize human errors. A structured invoice processing system ensures that only verified, approved invoices receive payment. It also reduces mistakes during the manual invoice approval process, such as duplicate payments, late payments, and cash flow issues.
- Improve vendor relationships to secure better benefits, like early payment discounts. Fast invoice approvals ensure timely payments and keep you in good standing with vendors. However, you can also negotiate perks for early payments.
For example, let’s say you have a Net 30 payment term with a vendor, and the vendor offers a 2% discount if you pay the invoice within ten days of the invoice date. (It is written as 2% 10 Net 30.) If you have a $100,000 invoice, you can save $2,000 by paying 20 days early.
To achieve these benefits, you should look for an approval workflow software that offers the following:
- Paperless invoice capture, with the option to upload physical invoices. Systems usually offer e-invoicing (where suppliers submit invoices directly to the system via electronic data interchange), vendor portals, or email integrations to manage receiving.
Most businesses receive ~80% of invoices electronically, while the remaining 20% are often non-PO invoices they receive for taxes and utilities. In our experience, changing the invoicing process many government agencies and utilities follow is challenging, so you will still need to process some paper invoices.
- Support for non-PO invoices. The system should allow you to receive and create approval workflows for non-PO invoices. As mentioned, these are common for taxes and utilities but also for services (legal, website development, office cleaning, etc.).
- Receipt management. Systems that allow you to store receipts and their details eliminate physical filekeeping and offer convenient three-way matching for invoices.
- Optical character recognition (OCR). This technology enables the system to analyze and extract key details from new documents, such as invoices and receipts. It also powers the automated matching feature below.
- Two & three-way matching for invoices. This should be a vital function of any invoice approval system. These features allow the system to automatically pull corresponding purchase orders and receipts and match them with invoices.
- Invoice routing (aka invoice approval workflows). Routing rules ensure invoices reach the right manager(s) for final approval before payments. You can also set workflows for invoice exceptions and invoice reviews. You should be able to set multi-step flows, and systems should automatically push invoices down the line and tag reviewers in.
- Real-time notifications (via app, email, Slack). The system should notify the appropriate managers when new invoices are available for approval — to ensure timely payments and avoid workflow bottlenecks.
- Omnichannel approval tools. Managers should be able to review and approve invoices from notifications. This way, reviewers can quickly give the final green light from mobile devices, email, or messenger apps; they’re not stuck finalizing invoices via desktop.
- Organized approval dashboard. The system should include a single place to see all your pending approval requests; this prevents requests from getting lost in the shuffle.
- Integrations with ERP and accounting software. Your invoice approval system should integrate with the accounting or ERP software you use to manage and dispatch payments.
ProcureDesk’s Invoice Approval System
ProcureDesk is a complete procure-to-pay system; its features and automation support the entire purchasing lifecycle — from when a purchase request is raised through invoice reconciliation.
Our system’s toolset includes:
- Punchout and custom catalogs to create a curated purchasing hub
- Granular budget controls to control spend proactively
- Custom purchase request (PR) forms
- Automated PR approval workflows
- Automatic purchase order (PO) generation & purchase order templates
- Electronic data interchange (EDI) to automatically send invoices to vendors
- Real-time PO tracking to monitor orders through fulfillment and delivery
- Receipt management to verify deliveries and order conditions and eliminate manual file-keeping
- Vendor invoice management tools, including e-invoicing, vendor portals, email integrations, and physical uploads
- Optical character recognition (OCR) to extract critical data from invoices
- Two- and three-way invoice matching
- Automated invoice routing
- Accounting & ERP integrations to support invoice payments
- Spend analysis dashboard & reporting tools
We work with businesses of all sizes. Our toolset and pricing appeal to small, fast-growing companies, but we also offer custom enterprise solutions to support large, global brands.
Our solution’s flexibility and accessibility are partly due to our guided onboarding process; we tailor each instance of ProcureDesk to client requirements.
Our team will help create a controlled purchasing hub (connect catalogs, set budgets, design approval trees, integrate accounting software, etc.), show you how to leverage automation tools through workflows, and train you on the features. Our system scales with you to continually optimize procurement processes.
Below, we’ll show you our features to support invoice management and accounts payable processes.
Centralized Invoice Capture & Paperless Invoicing
ProcureDesk simplifies invoice management by allowing you to receive and manage invoices directly in our system. You can receive invoices in several ways:
- E-Invoicing: Vendors can import invoices to ProcureDesk via EDI.
- Vendor portals: Vendors can import invoices to ProcureDesk via portal. (You can create unlimited vendor portals to manage each relationship separately.)
- Email integrations: Accounts payable teams can integrate email accounts they use to receive invoices and see those documents in our system.
- Uploads: Accounts payable teams can scan and upload non-PO invoices or other invoices they receive in the mail.
After upgrading to an invoice approval system like ProcureDesk, you can communicate with vendors about how you prefer to receive invoices. For example, if vendors consistently mail invoices but you’d prefer they import files via portal, you can share access to portals and show them how to share invoices electronically.
All new invoices appear in the main dashboard, so finance teams can easily keep tabs.
Once our automated system detects a new invoice, it uses optical character recognition (OCR) to extract critical data, such as invoice numbers, headers, line items, and amounts. Then, OCR fuels two key features:
- Duplicate management
- Automated invoice matching
Duplicate Management & Automated Invoice Matching
After extracting key data from invoices, our system can:
- Identify duplicate invoices and merge them.
- Pull the corresponding purchase orders and receipts to complete invoice matching.
Our invoice matching feature is more convenient than competitors’ with controls to ensure every invoice is handled appropriately.
- It offers two-way matching (for non-PO invoices) and three-way matching (for physical goods). After identifying non-PO invoices, it sources the receipts and routes them to an AP team member for review.
- When matching invoices for physical goods, it can determine if invoices are missing receipts and tag the purchaser to import the data and complete the process. This way, AP departments don’t have to intervene and track down receipts.
- Our system can also flag invoices with matching issues or other discrepancies and route these to AP team members for troubleshooting.
After matching invoices, ProcureDesk automatically routes them for approval.
Receipt Management
Before we discuss automatic approval workflows, let’s take a moment to review ProcureDesk’s receipt management module.
As mentioned, this is critical to the invoice-matching process — the system needs to be able to source receipts to validate and reconcile invoices. If it can’t manage receipts, it can only two-way match invoices (with POs), and accounting teams still need to step in to complete the matching process.
That’s why ProcureDesk offers a user-friendly receipt management module to assist the matching tool. This module is convenient because it reminds purchasers to upload receipts on the day of delivery and sends follow-ups if data isn’t imported.
(As mentioned above, it’ll remind them again if missing receipts stall invoice matching.)
With this module, purchasers can easily:
- Share a photo of the receipt or packing slip
- Confirm quantities
- Note order conditions
Then, this data is available for procurement managers to troubleshoot orders with incorrect quantities and damaged or missing items.
Automated Invoice Routing
Now, the bread and butter — ProcureDesk invoice approval workflows.
Our system lets you design automated workflows for your different invoice types so that after matching, each invoice reaches the right set of eyes.
You can create workflows for non-PO invoices, workflows by vendor or spend category, workflows for different departments, and more.
We’ll show you how to design and edit these workflows during onboarding so you can create and modify invoice approval processes at any time.
Our system is also convenient because it:
- Notifies managers as soon as new invoices are available for review. It can also tag reviewers down the line in real-time (e.g., once reviewer A approves the invoice, our system will notify reviewer B, and so on).
- Notifies managers when new invoices are available for review and tags reviewers in real time (e.g., when reviewer A approves the invoice, the system notifies reviewer B, and so on).
- Provides omnichannel approval tools so managers can view and approve invoices from desktop or mobile apps, email, or Slack.
- Displays all invoices and their status so managers know what requires attention and what’s paid.
Accounting & ERP Integrations
After matched invoices are reviewed and approved, our system routes invoice data, with a copy of the invoice, to your integrated accounting system or ERP to prepare the invoice for payment. This saves you from the time-consuming process of manually recreating bills in your accounting system.
ProcureDesk integrates with most major accounting software and online payment tools to support payment processing. Our integrations include:
After sending payments in your accounting system, the invoice status updates in both places (your accounting software and ProcureDesk).
Our accounting integrations allow you to import master data, such as your chart of accounts and suppliers, into ProcureDesk to help set up the purchasing hub and establish spend controls.
Packages & Getting Started
We offer two packages and custom enterprise plans:
- Our full P2P plan ($850/month) includes our accounts payable automation module and tools discussed above. This includes our procurement automation package to support purchasing flows.
- Our procurement automation package is $518/month.
Both packages come with:
- Ten user seats — you can add more anytime
- A 30-day money-back guarantee
- White-glove onboarding & ongoing support
You can also supplement our core features with add-on modules: expense management, vendor contract management, and inventory management.
Alternative Invoice Approval Systems
During your search for invoice approval software, you may also see names like Tipalti, Stampli, AvidXchange, Freevo, Jotform, and more.
These are more AP-focused approval automation solutions, with features focused on invoice management and processing; they may not have as many purchasing management features as ProcureDesk (which could be a pro or con, depending on what you’re looking for).
Check out our guide here to compare the best AP automation software and learn about additional P2P solutions.
Final Notes
Now that you have the resources and know-how to comparison shop, you can begin browsing the market. But before making the final decision, follow these steps to ensure ROI:
- Estimate the time you spent processing supplier invoices and calculate the cost per invoice. (You can also use $15 per invoice as a benchmark.)
- Identify the tasks or processes you can support with automation.
- Quantify the savings from automation.
For example, most customers see a 30% reduction in invoice processing time. If they process 5,000 invoices annually, the total processing cost is $75,000 (5000*$15). Using the 30% baseline, they can save $22,500 annually.
- Brainstorm with team members and stakeholders to identify your invoice approval system’s top three use cases.
- Select a couple of vendors (two or three), schedule demos, and pick the best value for your company.
