What is Invoice Approval?
Invoice approval means reviewing and approving supplier invoices before these are posted as a cost in the ERP system and sent for payment.
Invoice approval rules
As part of the accounts payable process organisations usually have set internal rules for supplier invoice approvals. Who have the right to approve invoices? From which suppliers? At what amount limits? At what stage should the CFO or CEO always have a final approval?
Such authorisation rights should define who is authorised to approve a cost on behalf of the company. For example, a cost center owner may be authorised to approve costs for that cost center up to a specific amount. Any costs exceeding that amount limit must then be approved by the CFO and/or CEO before the invoice can be paid.
If the company uses an accounts payable automation solution, such authorisation rights can be configured in the system so that invoices are automatically distributed to the right person(s) for review and approval.
Invoice approval process
An accounts payable software also simplifies the invoice approval process by presenting the invoice information in digital format for easy review by the approver. In addition, the system can automatically provide suggested coding based on the chart of accounts and rules configured by the company or based on historical data. This way, the invoice approval process can be completed quickly and easily using a computer or mobile device.
Learn more about invoice approvals and AP automation
Read our blog post: Approve invoices remotely and 3 other benefits of paperless AP
Explore more definitions in this blog post: Key terms for AP professionals