If you’re a CFO, controller, or finance leader, you know the stress of closing the books on time. Especially when the approval process for your accounts payable (AP) team is manual. A broken workflow includes chasing paper invoices and waiting on slow email approvals. These delays ripple across your finance team.

Ardent Partners reveals that companies take over 10 days to process one invoice. These delays don’t just impact your daily schedules. They can also put your vendor relationships and operational continuity at risk. Late or missed invoice payments can strain supplier relationships. Businesses can lose preferred pricing or have key deliveries of goods halted.

Small and mid-sized businesses are replacing outdated paper-based workflows. They are using automation software designed for AP. Simplifying and automating your AP invoice approval process yields many benefits. Forbes reports that companies using automation have 81% lower processing costs. These businesses also experience 73% faster processing cycle times. All this gives your AP team more control and helps the business scale, without the stress.

This guide will show how automated invoice approval workflows work and their benefits. We will also provide a step-by-step walkthrough to modernize your AP function.

Why manual AP invoice approval harms businesses

A manual invoice approval process becomes a liability as you manage multiple invoices. Paper files, email threads, and spreadsheets can cause issues. They leave room for costly mistakes, slowdowns, and compliance risks. That affects everything from day-to-day operations to vendor trust.

Let’s break down the biggest problems with traditional, paper-based AP workflows:

High processing costs

Manually handling invoices is expensive. A 2024 Ardent Partners report says the average cost per invoice processed is under $10. These costs include labor-intensive tasks like printing, routing, storing, and reviewing invoice data. Most of the cost comes from three areas: 20% for capturing the invoice, 70% for processing and matching, and 10% for creating it in your accounting system.

ALT: Bar chart showing cost breakdown for an invoice. 70% is for processing and 20% is for capturing the invoice, and the remainder is for adding it into the accounting system. 

Your payable team spends hours every week processing and managing approvals. This takes focus away from strategic work. That’s before accounting for missed early payment discounts and late fees. It also doesn’t include the cost of correcting errors. 

Slow processing & delays

With manual routing, an invoice might pass through multiple team members. They can get buried in an inbox or sit untouched if a stakeholder is traveling. All these delays cause late payments. Consistently paying suppliers late can lead to mounting frustrations. This may cause them to end their relationship with your business. This can create supply chain gaps that are hard to resolve.

One missed payment can disrupt projects or delay deliveries. Automating your accounts payable approval process keeps things moving. This is helpful even when designated approvers are unavailable.

Frequent errors & duplicate payments

Manual data entry is prone to human error. Typos in invoice numbers, incorrect amounts, and mismatched invoice details are common. Without automation, you may accidentally pay the same invoice twice. This is especially true when working from spreadsheets or email threads.

Fortunately, tools like ProcureDesk offer two-way and three-way invoice matching. These help to maintain financial accuracy and minimize duplicate invoices. Businesses can avoid errors that drain cash flow and require follow-ups and reconciliation.

Compliance and audit risks

When you rely on scattered records, it’s easy to lose track of who approved what and when. Manual AP processes also increase fraud risk. Without proper approval logs and controls, fake or altered invoices could slip through. This increases the risk of fraud and financial loss. AP automation tools provide audit trails and security permissions to prevent unauthorized access. 

An automated workflow process tracks every step of your AP invoice approval process. These processes adapt to various regulations, easing the burden on local teams. This helps improve compliance, making audits faster and less stressful.

Lack of visibility into spending

Without centralized tracking, your AP department doesn’t know which invoices are pending. They can’t identify where delays are occurring or see how much liability is tied up in unapproved invoices.

This causes poor forecasting, missed cash flow opportunities, and a reactive finance culture. Finance leaders are left asking, “What’s been spent?” instead of planning where to spend next.

How AP invoice approval workflow automation works

Shifting from a manual invoice approval process to an automated one isn’t just about spend. It’s also about gaining better control over your financial operations. The right automation solution helps your AP team move from slow, error-prone processes. This frees them up to focus on strategic work.

How does a modern accounts payable approval process transform your workflow? Let’s use ProcureDesk as an example:

Invoice capture

An automated system centralizes all incoming invoices in one place. This means less work receiving paper invoices or scattered emails. Usually, this happens through a designated AP inbox or supplier portal.

The systems automatically read the invoice data and capture relevant invoice details. It even initiates the approval flow without manual intervention. This reduces lost invoices and eliminates the need to chase missing documents.  

Data extraction

Modern automation software like ProcureDesk uses Optical Character Recognition (OCR) technology. It extracts details like vendor name, invoice number, PO number, due date, and total amount.

Automating invoice data extraction helps eliminate human errors. It also saves time on manual entry, which improves payment processing accuracy.

Smart approval routing

Manual handoffs and endless email threads are replaced by automated routing. The system sends invoices to the right approvers based on:

• Department or cost center

• Invoice amount thresholds
• Vendor-specific rules

This speeds up your AP invoice approval process. Plus, it makes sure no invoice is stuck waiting to go to the correct approvers.

Invoice matching automation

OCR technology uses machine learning to get key details from invoices. It goes the extra mile by matching them with purchase orders and invoices. This is called a two-way match.

A three-way match can be added by matching the purchase order, invoice, and receipts. Any discrepancies are flagged automatically for review. This saves your AP team from conducting tedious manual checks. As a result, only valid and verified invoice payments proceed further. Now, you are better protected against fraud, duplicate payments, and overbilling.

Integration with your accounting system

Once approved, the invoices sync directly with your preferred accounting platform. This could be QuickBooks, Sage Intacct, Xero, NetSuite, or Bill.com.

No more double entries. No more late nights copying invoice details into financial records. The data flows seamlessly, improving payment processing speed and accuracy.

ProcureDesk also supports integrations with ERP systems. This is for companies needing end-to-end visibility across procurement, inventory, and finance operations.

Real-time dashboards and reporting

With automation, your AP department gains instant insight into the entire workflow process. They can now do the following:

• Track the status of invoices across the pipeline.
• Identify bottlenecks by team or approver.
• Monitor upcoming due dates and payment terms.
• Forecast cash outflows with confidence.

This visibility turns AP from a reactive back-office into a proactive financial engine. Automating the AP invoice approval process does more than save time. You unlock smarter financial management, stronger compliance, and better supplier relationships.

Benefits of using AP invoice approval workflow automation

An automated accounts payable approval process delivers major improvements in speed and accuracy. It also enhances compliance and strengthens vendor relationships. Here’s how it pays off for your AP team and your business as a whole:

Saved time across the entire AP department

Manual invoice handling eats up valuable hours. Chasing approvers, verifying invoices, and manually keying information into accounting systems takes time. All this administrative work slows down your team.

Automation helps capture and route invoices instantly. The designated approvers receive automatic notifications. Approved invoices are synced with your ERP or accounting system without manual entry.

Coast Flight Training transformed its AP process with ProcureDesk’s automation software. Before automation, their team faced time-consuming manual tasks. They also experienced frequent delays in invoice approvals. Switching to ProcureDesk reduced processing time by 25%-35%. This allowed their AP staff to focus on more strategic work and improve efficiency.

AP departments that spend less time on papers and emails can focus more on strategic work. This allows them to analyze areas like cash flow optimization and spend forecasting.

Fewer errors and cleaner audit trails

Every manual touchpoint, like retyping an amount or forwarding an invoice, introduces risk.

With an automation solution like ProcureDesk:

• Invoice matching happens automatically, flagging discrepancies in real-time.
• Errors like duplicate payments or missed payment terms are significantly reduced.
• All invoice details are documented in an audit-friendly system.

Quantus, a biotech company, transformed its expense management by implementing ProcureDesk. The company couldn’t track, manage, or control spending. ProcureDesk provided real-time visibility, integrated vendor catalogs, and seamless QuickBooks integration. The company eliminated duplicate payments and tracked every transaction, minimizing errors. 

Cost savings that go straight to the bottom line

Automation solutions significantly reduce the costs of processing invoices manually. Businesses save by cutting labor time and eliminating paper expenses. Automation enables faster approvals that capture early payment discounts. They also help prevent late fees by ensuring invoices are processed on time. Altogether, these benefits add up to substantial savings over manual processes.

ProcureDesk helped School in the Square improve its budget accountability and operational efficiency. They struggled to track spending through spreadsheets and third-party finance companies. This led to incomplete and outdated financial snapshots. The lack of real-time visibility led to issues like paying for items that were never received. Now, they can easily track spending and view budget status in real-time to save costs. This helps them make informed financial decisions. 

Better cash flow and spend visibility

Finance teams can’t forecast cash outflows when invoices are in inboxes or on desks.

A live dashboard lets you view the real-time status of every invoice. This makes it easier to forecast payment processing timelines with confidence. It also helps avoid surprises like large batches of unpaid invoices before the end of the month.

El Hogar, a nonprofit organization, used ProcureDesk to improve its spend visibility. Manual processes made it impossible to track real-time expenses and keep stakeholders updated. The lack of transparency delayed reimbursements, and spending wasn’t checked. Now, they have a live dashboard to view every invoice and purchase request. Self-approvals meant requests were managed at the program level. Vendor catalogs were made for top suppliers to make repeat purchasing easier.

Improved vendor relationships

Vendors value reliability. They want to be paid on time according to the agreed payment terms. Not weeks later, because an invoice was misplaced.

An automated payable workflow helps with faster invoice turnaround times. It also helps with on time (or early) invoice payments. 

Indiana Beach used ProcureDesk to foster trust and improve vendor relationships. Initially, paper-based purchase orders and email approvals led to slow turnaround times. This strained relationships, especially during peak season when demand was high. With ProcureDesk, the team automated purchase orders and invoice matching. This gave management real-time visibility, and approvals were made faster. In turn, payments are made faster to vendors. As a result, Indiana Beach can scale operations while keeping suppliers happy simultaneously.

In short, an automated AP invoice approval process doesn’t just streamline tasks. It creates measurable financial benefits and empowers your finance team members. Additionally, it strengthens compliance and makes you a more attractive partner to vendors.

7 Steps to automate your AP invoice approval workflow

Manual approval processes may work at low invoice volumes. But, they quickly become a bottleneck as your business scales. Here’s a walkthrough to automating your accounts payable approval process.

Step 1: Centralize Invoice capture

The first step in automating your accounts payable approval process? Centralize invoice receipts. Start by ensuring all invoices are collected in one place. Many businesses rely on scattered methods to receive invoices. These include emails to individual employees, shared folders, or even paper invoices. This process creates delays and increases the risk of missing or duplicate entries.

Instead, send all incoming invoice data into a dedicated inbox (invoices@yourcompany.com). Now, the AP team has complete visibility and avoids chasing teams for lost documents. It’s the foundation of a reliable invoice management system.

There are two key components to setting up centralized invoice capture:

A. Define supplier submission policies

Establish clear submission requirements for your vendors. Specify that all invoices must be emailed, no physical mail or faxes. Each invoice must include a purchase order number and stick to your payment terms.

Vendors should email invoices as PDFs or e-invoice files to a designated address. Enforce a “No PO, no pay” policy on your documents. This makes sure that every invoice can be validated upfront. It’s a simple but effective guardrail in your manual invoice approval process.

B. Communicate the policy clearly

Once your internal process is defined, communicate it to your vendors. Update your purchase orders to include billing instructions. This prevents miscommunication and supports smoother invoice processing.

Send a bulk email to notify your vendor base of the new submission process. Reinforce this during onboarding for new suppliers. Internal stakeholders should also know to forward invoices only to the centralized inbox. This reduces follow-up cycles and maintains accuracy.

Step 2: Implement electronic Invoicing (e-Invoicing)

With e-invoicing, suppliers submit structured invoice files in EDI or XML formats. Your automation software can validate these instantly. This removes the need for manual entry altogether.

Unlike standard PDFs, these invoices go straight into your payable workflow. Here, they can be auto-matched, approved, and queued for payment processing.

Here’s how to roll out e-invoicing in your AP department:

A. Identify high-volume suppliers

Start with vendors who send frequent or high-value invoices. These are typically the best candidates for integration. Companies that receive recurring invoices from vendors like Amazon benefit from invoice automation. They tend to see the fastest ROI after adopting these solutions.

Analyze your historical volume of invoices by vendor. Apply the 80/20 rule: select the top 20% of suppliers responsible for 80% of total invoices. These vendors benefit from structured data submission. This streamlines both your invoice matching and invoice payment processes.

B. Confirm supplier capabilities

Ask shortlisted vendors if they support electronic formats like XML or EDI. Don’t worry if the terms feel technical. ProcureDesk’s onboarding specialists can help bridge the gap. A simple email like this will suffice.

“Hi [Vendor name], We’re improving our business process by adopting e-invoicing. Based on your invoice volume, we’d like to explore integration. Are you able to send invoices in XML or EDI format? If yes, we’ll loop in our IT team for next steps.”

C. Implement and test

Work with your vendors and your AP platform provider to implement and test the data exchange. Structured e-invoices don’t always include visual files, just invoice data. Your system should allow users to preview or print an invoice if needed. This includes team members involved in reviews.

Step 3: Automate PO and non-PO Invoice workflows

Not all invoices are created equal. Some reference purchase orders. Others, like utilities or subscription services, do not. Your accounts payable approval process must accommodate both without manual intervention.

For PO-based invoices, consider implementing three-way invoice matching. This covers the invoice, purchase order, and receipt. If everything matches, the system can auto-approve the invoice.

For non-PO invoices, the system should apply business logic (like department ownership or expense type) to route the invoice to the designated approvers.

Step 4: Set up smart approval routing

In manual systems, approvals are delayed by unclear workflows or unavailable stakeholders. Automated routing sends every invoice to the right person/team at the right time. You control the process by setting the rules the system follows.

Configure routing based on factors like invoice amount thresholds and departmental cost centers. It also depends on vendor categories and contract payment terms.

For instance, invoices under $500 may go to one manager. Those over $5,000 may require a second layer of approval. You can also add team members as backups to prevent bottlenecks when someone is on leave.

Step 5: Define tolerances for minor exceptions

Some discrepancies don’t justify a delay. If an invoice amount is off by 2% due to exchange rates or rounding, it doesn’t need managerial review. These minor discrepancies can be handled automatically.

This is where automation solutions really shine. Set tolerance thresholds for invoice details like:

• Price variance (e.g., ±5% or $50)
• Quantity mismatch (e.g., ≤2 units)
• Freight or tax rounding differences

Step 6: Monitor approvals with dashboards

Even with routing rules, visibility is key. Finance leaders and the AP department need to know exactly where invoices stand. They must know who has approved them, who hasn’t, and which vendors are waiting on invoice payments.

Use real-time dashboards to monitor:

• Pending approvals by stakeholders
• Invoices missing receipts
• Outstanding payment amounts
• Overdue invoices impacting payment processing

This allows the AP team to identify delays quickly and send automated reminders. In turn, this avoids manual follow-ups that eat into productivity.

Step 7: Integrate with your accounting system

Your payable workflow is nearly complete. Make sure approved invoices sync with your accounting platform. Manually re-entering invoice data increases error risk and wastes time.

Once an invoice is approved, ProcureDesk automatically creates a matching record. This is done in systems like QuickBooks, Xero, NetSuite, and more.

This makes sure you have consistent invoice details, accurate ledger entries, and clean audit trails. All this without requiring the AP team to duplicate work, saving you time, money, and effort.

Automated AP invoice approval workflow best practices

Once your workflow is live, optimizing it is key to long-term efficiency. Here are essential best practices to make sure your automation delivers lasting results.

1. Establish clear spending and approval guidelines

Unclear rules are one of the top causes of delays in the manual invoice approval process. Make sure employees know aspects like:

• What needs a purchase order
• Who are the designated approvers by department or threshold
• How invoice payments are scheduled based on payment terms

2. Set up spending limits and budget tracking

Automation allows real-time budget enforcement. Assign budgets by department or team. Go a step further and set automatic notifications when spending nears limits.

This improves forecasting and cash flow planning. It also aligns other teams with your payable department’s financial goals.

3. Regularly review and update your workflow

As your business evolves, so should your approval logic. Every quarter, evaluate:

• Are new departments added?
• Have team members changed roles or left?
• Are new invoice types being processed?

Sometimes, companies uncover duplicate templates, outdated workflows, or unneeded approval layers. Optimize these as needed to boost efficiency.

4. Provide onboarding and training for team members

Run regular training and update your approval templates or documentation as workflows evolve. Include visuals or short how-to videos for faster onboarding. ProcureDesk users get access to our video tutorial library. This helps you to answer any questions quickly.

5. Build in regular audits for continuous improvement

Auditing isn’t just about compliance, it’s an efficiency tool. Take note of:

• Invoices that are consistently delayed at the same approval step.
• Vendors who frequently miss invoice data or invoice details.
• Where do exceptions like pricing variance occur most often.

How to Choose the Right AP Automation Platform

Choosing the right automation software for your AP department goes beyond features. Your solution must fit your invoice volume, current systems, and support designated approvers. Here are four key things to consider:

Integration: Make sure the platform works with your current ERP or accounting system.

Scalability: Choose software that supports your business process as you grow.

Usability: Prioritize an intuitive interface for your AP team and stakeholders.

Customer support & onboarding: Look for vendors who provide onboarding help and live support.

Need help? Read our guide on the 10 Best AP Automation Software in 2025.

FAQs

What is an AP invoice approval workflow?

This is how companies review, approve, and pay supplier invoices. It typically involves:

• Invoice data capture from suppliers
• Validation against purchase orders (POs) or contracts
• Routing invoices to designated approvers based on thresholds
• Scheduling invoice payments within the agreed payment terms

Modern workflows rely on automation solutions. These help reduce human error and speed up approval times. As a bonus, it provides a clean audit trail for financial transparency.

Do all invoices need manual approval?

No, invoices that match the purchase order and receipt can be auto-approved. This can be implemented through your automation software.

Manual intervention is reserved for exceptions. This means missing receipts, pricing discrepancies, or vendor policy violations. Fewer approvals allow the AP department to focus only on key issues.

How long should it take to approve an invoice?

Invoices can take around 10+ days to route approvals and payments manually.

Conversely, companies using an electronic invoice approval process like ProcureDesk experience the opposite. They can approve routine invoices within hours and exceptional situations within days. Shortening approval cycles improves cash flow, strengthens supplier trust, and streamlines payment processing.

Do I need to validate invoices?

Validating invoices serves as a critical process for several reasons:

• Accuracy: Makes sure the invoice information aligns with the actual goods or services received.
• Legitimacy: Confirms the legitimacy of the transaction. This helps prevent fraudulent or unauthorized invoices from being processed.
• Regulatory compliance: Businesses can adhere to legal requirements and industry regulations on financial practices.
• Effective budget control: Facilitates compliance with budget constraints by verifying that expenses align with approved budgets.

Conclusion: Why automating your AP invoice approval workflow matters

Manual, paper-based AP invoice workflows create avoidable risks for growing businesses. These include high processing costs, more errors, and rework. This poor visibility causes an invoice to become a liability, damaging vendor relationships.

Automating your accounts payable approval process is no longer optional. It’s critical for operational efficiency, cash flow management, and financial control. An efficient payable department helps with cash flow and faster book closings. This helps whether you handle hundreds or thousands of invoices every month.

Want to speed up your invoice approvals and cut costs? Book a free demo and see how ProcureDesk can help.