What is invoice approval? 

Invoice approval is the straightforward process of reviewing and authorizing invoices from suppliers before making payments. This process typically includes matching invoices with relevant documents.

Invoice approval process (without automation software)

While the specific steps may vary between companies, for the purpose of this page and explaining the general process (without AP automation software), invoice approval looks as follows:

  1. Receive the invoice from the supplier.
  2. Match the invoice with other relevant documents, such as purchase orders.
  3. If the invoice can't be correctly matched with a purchase order, it must be assigned to someone, often the purchasing manager, to resolve the issue and re-enter the approval process.
  4. After successful matching, invoices are sent to the responsible authority for approval, like the department head or CFO.
  5. Once approved by the designated authority, the invoice is forwarded to the accounts payable team for payment.
  6. Once paid, the invoice can be closed.

Invoice approval rules

Each company has its own approval structures and processes, known as invoice approval rules. These rules often depend on seniority approval within the company and the invoice amount. Managers may have a higher approval limit than executives, and directors may have an even higher limit.

Additionally, there might be supplier-specific clauses where senior employees need to approve transactions with certain suppliers, while less senior employees can approve larger purchase amounts with whitelisted vendors. These rules can be integrated into accounts payable automation solutions, ensuring invoices are only approved based on pre-defined criteria.

Explore more about invoice approvals

To learn more about invoice approvals and how Basware AP Automation takes the manual, guesswork out of your business, get in touch with a team member. Alternatively, explore our other AP Automation guides for valuable insights and industry best practices.