Optimize Approval Processes: 7 Tips to Simplify Your Accounting 

Even if it doesn’t go as far as outlined above, bumpy approval processes often mean increased administrative work and cause further stress in the department: “Where is the invoice? Who still needs to sign off? What’s the problem?”

Fortunately, we are entering the age of electronic invoicing and these kinds of problems with approval processes should soon be a thing of the past. In this blog post, we’ll share seven essential tips to help you optimize your approval processes and significantly simplify your accounting. 

Digitalizing approval processes is the first and most important step toward optimization. To achieve this, you’ll need accounting software with a digital workflow, which reduces manual intervention in invoice processing and minimizes sources of error. 

A digital workflow is an automated process managed by accounting software. In this software, tasks and approvals can be mapped digitally. Tasks are automatically forwarded to the right people, deadlines are set, and progress is monitored in real time. All steps are documented digitally, ensuring an optimal level of transparency and traceability. 

2. Define Clear Responsibilities 

To avoid delays and misunderstandings, it is important to establish clear responsibilities. All employees should know exactly who is required at each stage of the invoice workflow, depending on the type of invoice document, and who needs to grant approval.

Invoice software with workflow management also supports you in this task. Specific roles are assigned to all participants within the software – such as clerk, reviewer, or approver – and each role has defined tasks and access rights. In addition, clear approval rules are established: who is authorized, in which role, to approve invoices up to a certain amount? These rules are embedded in the system and applied automatically. 

3. Reduce Approval Stages

By analyzing your existing approval process, you can identify additional bottlenecks that hinder the workflow. You can achieve a very efficient form of optimization by reducing the number of approval stages within a workflow. This eliminates unnecessary steps, or you can distribute critical decision-making responsibilities from a single individual to multiple responsible parties. 

Analyze which approvals consume the most time or frequently cause delays. Evaluate whether all current approval levels are truly necessary. Streamlining the process by having fewer people approve less critical decisions or by reducing the number of approval stages can often speed things up. For instance, allowing smaller amounts to be approved directly at the processing level, rather than routing them through multiple hierarchical levels, could be more efficient. .

4. Enable Parallel Approvals 

Imagine a scenario where an incoming invoice requires approval from both the finance and purchasing department. In a traditional approval process, the invoice would first be reviewed and signed off by the finance department before being forwarded to the purchasing department. The process can be accelerated, however, if multiple approvals are obtained simultaneously. This approach is called parallel approval. 

In a parallel approval process, both departments receive access to the invoice simultaneously and can carry out their checks independently. Once both approvals are granted, the process can continue. The implementation of parallel approvals is made simpler by using a digital workflow system, which can map and monitor simultaneous processes, ensuring that all necessary approvals are captured and no steps are overlooked. 

5. set up Automated accounts payable (AAP) processing

A posting system that operates entirely without human intervention still sounds like science fiction to some financial managers. However, it is already possible to carry out dark postings for certain invoices. These are booking processes that run in an automated process without any human involvement or manual verification. They are part of a fully digitalized approval process in which certain business transactions, such as incoming invoices, are automatically captured, reviewed, and posted. 

An example use case for aap processing is a supplier who has contractually agreed to generate the same invoice amount each month. In this scenario, the accounting software is configured to automatically recognize these invoices, match them with the corresponding contract or delivery note, and post them directly, without the need for a staff member to manually review the invoice. This process is not only more secure; it is also less prone to errors than when human intervention is involved. 

6. Set Deadlines and Escalation Processes

To ensure that invoices and financial documents are processed on time, the accounting department should have clear deadlines for all approval processes. Deadlines ensure that tasks are completed on time, minimizing the risk of late payments, penalties, and cash flow issues. They also enhance accountability among the individuals involved, as everyone now knows exactly which tasks need to be completed and by when.  

Escalation processes, on the other hand, are essential for detecting and addressing delays early on. If an approval is not completed within the specified timeframe, the process should automatically be forwarded to a higher authority to prevent the workflow from stalling. Implementing escalation processes boosts transparency and enhances collaboration, as challenging tasks can no longer be overlooked. 

7. Continuous Process Improvement and Feedback Culture

Regularly reviewing and adjusting workflows can further accelerate and simplify approval processes in accounting. This not only reduces errors but also makes the entire accounting process more flexible. This way, changes in the business environment, corporate structure, or new legal requirements can be integrated more quickly into internal operations. 

A strong feedback culture significantly supports this process improvement. Employees who actively give and receive feedback are better equipped to identify and address problems and potential improvements in the approval processes more quickly. Open communication also enhances collaboration and understanding within the department, allowing for faster and more targeted development of solutions. Ultimately, this leads to a more efficient accounting process that delivers high-quality results and makes work easier for everyone involved. 

The Bottom Line

Optimized approval processes are a crucial factor for efficient and secure accounting. Through digitalization, clear guidelines, workflow optimization, and continuous improvements, you can not only enhance efficiency but also increase the satisfaction of your business partners and employees in the long term.