No one wants to have clients who pay their invoices late. The delayed payments that small businesses have to deal with collectively result in debt of up to $3 trillion globally. As a business, making early payments leads to better relationships and credit terms with other businesses, discounts on purchases, and improved analysis and reporting for better decision making by the management.
While there are instances when you can’t control when you offset your invoices, you only need to improve how you approach your invoicing procedures to avoid potential problems. Lengthy or even impaired approval processes can delay payments. Learning how to improve those processes means better cash flow for your business and stronger relationships with clients.
Here are four tips for improving your invoice approval process:
Automate the Matching Of Invoices
Invoices are your ticket to getting paid, and the businesses that offer you services expect that you will offset them as soon as you get them. If you have to pay multiple businesses at the same time, it can be time-consuming to sort through similar invoices. Often, errors are made in the line of duplicate payments and the loss of the invoices themselves when a company decides to use a manual sorting system.
The Freshbooks website: a company that offers a free way to invoice, notes that it’s advisable to integrate an automated invoice matching system that comes with simple-to-use invoice templates into your financial processes to increase the speed at which you can track and pay invoices. This will free employee time as they can work elsewhere. With an automated invoice matching system, duplicates and exceptions can be flagged to reduce losses.
Automate the Invoice Approval Routing
For an invoice to be fully approved, it often has to go through more than one person. Since not all invoices will follow the same route before payment, it can be stressful to manually track them to ensure that they reach the approver. The complexity of the approval levels of some invoices will further make them take painfully long before they can be paid.
These issues can be resolved by integrating the predetermined invoice approval route into your financial systems. Once a verifier is done dealing with an invoice, they can pass it on to the next stage with less friction. This way, invoices can move faster throughout the organization and payments can be made quicker.
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Adopt Email Approval
With an automated invoice routing system, it will only take seconds for verifiers to move the approval task along to the next step. The next approver can log in to the system to approve their part. What about when one verifier is away on a business trip?
This doesn’t at all mean that you have to wait for them to get back for the payment to be made. With an email approval system, such individuals can be alerted to move the invoice to the next stage. While they still have the option of securely logging in to the company’s financial systems, you can add an option for verifying the invoices by only clicking a button on the email.
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Have a Strong Paper Trail
Paperless paper trails can be an information-mine to a business. Taking this step will ensure that transaction can be tracked, especially for auditing purposes. Managers can also understand and track the steps taken by the invoices.
In the quest for compliance, a well-described paper trail can provide enough information to remain on the right side of the law. The data collected can fuel improved decision making and innovation by the accounts payable department.
A stellar relationship between you and the businesses you work with can lead to exponential business growth, and paying invoices on time will have a significant role in achieving this. With an optimized business invoice approval process, you can develop a business culture that enhances your reputation and builds trust.