Electronic invoice approval – how does it work and who is it for?

The goal of every company is to simplify business processes as much as possible. This allows for numerous benefits to be realized, like optimizing work hours, which automatically means greater focus on achieving income and development.

By reducing the number of steps for particular ‘bureaucrat’ processes, more accurate business data is realized in the shortest time possible and in the end, possible mistakes are avoided.

All of this also applies to invoice processing which, without the help of digitalization, requires significant time and leads to possible oversights like double inputs, payment delays or even double payments etc. So, electronic invoice approval systems have appeared on the market as a solution. But what does that actually mean in affect and how does it work? Who can use this system and can they benefit from it?

Answers were provided by Jurica Jambrečina who handles developing systems for electronic invoice approval in the 4APP company. He clarified all the details, advantages and shortcomings, and business practice experiences.

How does electronic invoice approval work?

What is electronic invoice approval?

Jurica: Electronic invoice approval is a system that will help you store all incoming invoices in digital form so they can be easily manipulated. This means that when you receive an invoice in any form, you can simply input it into the system and forward it for approval to whomever necessary.

You can have all the data in one place and know when the invoice has been recorded or whether it has been paid. This way, oversights such as double payments and forgetting to pay or possible double inputs of the same invoice are being successfully avoided.

How can invoices be received?

Jurica: Invoices can be received in many ways whether if it’s via pot or mail, data like the invoice amount, PDV, invoice source, etc. If the invoice came in via an e-account, the system will automatically receive and process it. The company itself chooses who is in charge of entering invoices. It could be one or more persons, after which the invoice is forwarded to persons responsible for approval of invoices.

Again, that can be one or more persons, depending on the structure of the company. The system itself sends a mail to persons responsible for invoice approval, in order for oversights or possible mistakes to be avoided.

Who can implement the electronic invoice approval system?

Usefulness criteria – number of invoices

When discussing the possibilities of implementing the electronic invoice approval system, there are no limits to who can use it. Thus, anyone who thinks they would have use of it can implement it. Still, one of the following factors has to be considered: the number of incoming invoices and/or number of people in the invoice approval chain.

Jurica: Both criteria are important and we can actually say that only a company that has one person responsible for just a few invoices monthly won’t have much benefit except easier coordination. But even if you have only one person responsible for invoices and the number of monthly invoices is susceptible to possible errors, e.g. more than 20 invoices, the system is still very useful.

Also, if you have a small number of incoming invoices, but a few people in the approval chain the electronic invoice approval system will be more then welcome.

Is there possibility for mistakes?

The electronic invoice approval system was developed exactly for the purpose of having all data stored in one database.This avoids the possibility of double entry or non-payment, as well as to put an end to lost bills.

Jurica: It is important to mention that all necessary preliminary actions are being done in order to secure the system.Data is backed up and the system is set up in such a way that not all employees can access it.

Also, only certain people that are authorized can make changes in invoices so any subsequent data change can be prevented. Everything is done so that the data is always accurate, because that is the only way to have a complete financial picture of the company.

Electronic invoice approval as a working style

Digitalization has helped us in so many business branches that, after improvements it is hard to imagine going back to old ways of doing business. The same goes with the electronic invoice approval system.

Once the company has implemented a fast and simple way of processing invoices, it is hard to even imagine returning to manual processing. Inputting data in Excel and carrying physical invoices with post-it instructions for approval to various colleagues.

One of the great advantages is that systems like these have become utterly affordable and they don’t require a big investment. All of this causes less paperwork and more focus on profit, expanding business and developing new ideas.