How to Automate Invoice Approvals
Invoice approval is often the biggest bottleneck in accounts payable. Invoices sit in email inboxes, approvers forget to respond, and AP spends hours chasing signatures. Automating approvals can cut processing time by 50-80%.
Why Approvals Get Stuck
Before automating, understand why approvals fail:
| Problem | Cause | Solution |
|---|---|---|
| Lost in email | Invoices buried in approver’s inbox | Dedicated approval system with notifications |
| Approver unavailable | Travel, vacation, meetings | Delegation and escalation rules |
| Unclear ownership | Nobody knows who should approve | Defined approval matrix |
| Missing information | Approver needs more context | Attach PO, receipt, context automatically |
| Too many approvers | Everything needs 4 signatures | Threshold-based routing |
Designing Your Approval Workflow
Step 1: Map Your Current Process
Document how approvals work today:
- Who approves what types of invoices?
- What are the dollar thresholds?
- How do approvers receive invoices?
- How do they indicate approval?
- What happens when someone is out?
Step 2: Define Approval Rules
Create a clear approval matrix:
| Invoice Amount | Approval Required |
|---|---|
| Under $500 | Auto-approve (with matching PO) |
| $500-5,000 | Department manager |
| $5,000-25,000 | Department manager + Controller |
| Over $25,000 | CFO |
Consider other routing criteria: - Department/cost center: Route to department head - Expense type: Capital items to different approvers - Vendor type: New vendors need extra review - Project: Project manager approves project expenses
Step 3: Plan for Exceptions
Not everything follows the standard path:
| Exception | Handling |
|---|---|
| Approver on vacation | Auto-delegate to backup |
| Invoice sits too long | Escalate to manager’s manager |
| Urgent payment needed | Rush approval path |
| Dispute/question | Pause and flag for review |
Step 4: Set SLAs
Define expected turnaround times:
| Invoice Type | Target SLA |
|---|---|
| Standard invoice | 3 business days |
| High-value invoice | 5 business days |
| Rush payment | Same day |
Build escalation when SLAs are at risk.
Automation Components
1. Invoice Capture
Automation starts with getting invoices into the system:
- Email forwarding to intake address
- OCR/AI data extraction
- Automatic coding suggestions
- PO matching where applicable
2. Routing Engine
The system determines who needs to approve:
Rule-based routing:
IF amount > 5000 AND department = "Marketing"
THEN route to Marketing Director + Controller
Approval chains: 1. First approver reviews 2. If approved, routes to second approver 3. Continue until all required approvals complete
Parallel vs. Sequential: - Parallel: All approvers review simultaneously - Sequential: Each approver reviews in order
3. Notification System
Approvers need to know action is required:
- Email notifications: Clear, actionable, with approve/reject buttons
- Mobile push: For time-sensitive items
- Digest summaries: Daily list of pending approvals
- In-app dashboard: All pending items in one place
4. Action Interface
Make approving easy:
- One-click approve from email
- Mobile-friendly interface
- Context visible without clicking through
- Reject with required reason
- Request more information option
5. Escalation
When approvals stall:
- Reminder 1: After 1 day, gentle reminder
- Reminder 2: After 2 days, stronger reminder
- Escalate: After 3 days, notify approver’s manager
- Emergency: After 5 days, CFO visibility
Implementation Approaches
Option 1: AP Automation Software
Tools like Bill.com, Stampli, Tipalti include approval workflows:
Pros: - Purpose-built for invoices - Integrated with capture and payment - Pre-configured workflows
Cons: - May require process changes - Subscription cost
Option 2: Workflow Add-On
Tools like ApprovalMax add workflows to your accounting system:
Pros: - Works with existing tools - Focused on approval complexity - Flexible routing
Cons: - Another system - Integration required
Option 3: Built-In ERP Approval
Your accounting system may have native approval:
Pros: - No additional tools - Already integrated - No extra cost
Cons: - Often basic - Limited customization - May lack mobile access
Option 4: General Workflow Tools
Tools like Microsoft Power Automate or Zapier can create approval flows:
Pros: - Highly customizable - May already have license - Works with many systems
Cons: - Requires configuration - Not purpose-built for AP - Maintenance burden
Features to Look For
Essential
- [ ] Amount-based routing
- [ ] Multiple approval levels
- [ ] Email notifications
- [ ] Mobile approval
- [ ] Audit trail
- [ ] Delegation/out-of-office
Important
- [ ] Department/project routing
- [ ] Reminder automation
- [ ] Escalation rules
- [ ] Approve/reject from email
- [ ] Comments and questions
- [ ] Document attachment viewing
Nice to Have
- [ ] Budget checking before approval
- [ ] AI-suggested routing
- [ ] Parallel and sequential options
- [ ] Conditional logic
- [ ] Custom fields for routing
- [ ] Analytics and bottleneck reporting
Best Practices
Keep It Simple
Don’t over-engineer: - Fewer approval levels = faster processing - Clear rules = fewer exceptions - Trust empowers action
Use Matching to Reduce Approvals
If an invoice matches a PO that was already approved: - Consider auto-approving (within tolerance) - Or require only one approval instead of chain
Make Context Available
Approvers shouldn’t have to hunt for information: - Attach the PO - Show receiving confirmation - Display vendor history - Highlight unusual amounts
Enable Mobile
Many approvers are on the go: - Ensure mobile-friendly approval - Test the email approve experience - Consider mobile push notifications
Monitor and Improve
Track metrics: - Average approval time - Approval stuck rate - Rejection rate - Escalation frequency
Investigate bottlenecks and adjust rules.
Common Mistakes
Too Many Approvers
Every additional approver adds delay and failure risk. Only require approvals that add value.
No Delegation Path
Approvers take vacation. If there’s no backup, invoices stall.
Email-Only Notification
Email is unreliable. Use multiple channels and reminders.
No Escalation
Without escalation, stuck invoices stay stuck. Automate escalation.
Ignoring Mobile
Approvers often have time between meetings. If they can’t approve on mobile, they’ll wait until they’re at their desk (maybe).
Sample Workflow Implementation
Before (Manual)
- Invoice arrives in AP email
- AP enters into accounting system
- AP emails approver with PDF attached
- Approver reviews (when they see the email)
- Approver responds “approved”
- AP updates system
Time: 5-10 business days Problems: Lost emails, no tracking, no audit trail
After (Automated)
- Invoice forwarded to intake address
- System extracts data, matches to PO
- Workflow routes to correct approver based on rules
- Approver receives notification with one-click approve
- If no action in 24 hours, reminder sends
- If no action in 72 hours, escalates
- Approval logged, syncs to accounting system
Time: 1-3 business days Benefits: Tracking, audit trail, no chasing
Key Takeaways
- Map your current process before automating
- Create a clear approval matrix with thresholds
- Build in delegation and escalation from the start
- Make approving as easy as possible (one-click, mobile)
- Monitor approval times and address bottlenecks
- Fewer approvers = faster processing
Want to capture invoices cleanly before they enter your approval workflow? See how BillerPlus creates structured intake →