By The PaperLess Team
AP Automation Specialists | 1000+ Invoice Processing Implementations | Experts in Finance Control and Compliance
Invoice approval is where most finance teams fail. Not because they don’t want to approve invoices properly, but because their approval processes are fragmented, slow, and unreliable. Email chains disappear. Spreadsheets get lost. Approvers are in meetings. Invoices sit pending for weeks.
We’ve helped over 1,000 companies build proper invoice approval workflows. This guide answers the questions we hear most often about how to structure approvals that deliver control, compliance, and speed.
Understanding Invoice Approval
Q: What exactly is an invoice approval workflow?
A: Honestly, it’s simpler than most people make it. An invoice arrives. Someone needs to look at it and say yes or no before it posts to your GL. That’s approval.
A workflow just means you’ve defined the rules for who approves what. Maybe invoices under two thousand pounds go to your AP manager. Invoices over that go to Finance Director. International invoices maybe go to CFO. You’ve got a process. That’s a workflow.
The alternative is chaos. No one knows who’s supposed to approve. Invoices sit waiting. People ask ‘did anyone check this?’ Nobody knows.
Q: Why does invoice approval matter if we trust our suppliers?
A: Because you trust your suppliers until you don’t. And because trust isn’t control.
We’ve seen companies with excellent supplier relationships get hit with duplicate invoices. Invoices for work never delivered. Prices that don’t match quotes. These aren’t always malicious. Sometimes it’s just errors or miscommunication.Proper invoice approval catches these before they post to your GL. That’s not about trust. That’s about control. There’s a difference.
Q: What’s the difference between approval and just checking an invoice?
A: Huge difference, actually. Checking means looking at something. Approval means documented decision making.
If your Finance Director eyeballs an invoice in email and says ‘looks good,’ that’s checking. There’s no record. No audit trail. If they approve it in a system that logs their decision, who they are, and when they approved it, that’s approval.Auditors want to see approval. Not checking. Approval means evidence.
Q: How many approval levels do we actually need?
A: This is company-specific, but most businesses do well with two to three levels.
Maybe AP Manager approves invoices under one thousand pounds. Finance Director approves one thousand to ten thousand. CFO approves anything above that. That’s three levels and it works well for most mid-market companies.Some smaller companies do fine with just Finance Director approving everything. Some larger companies need five levels based on departments or cost centres. The key is defining rules that make sense for your business, then sticking to them.
Q: Should vendors be different approval levels?
A: Absolutely. Different vendors should route to different approvers based on your risk assessment.
Maybe your regular stationery supplier always goes to AP Manager approval. But a new vendor you’ve never dealt with? That goes straight to Finance Director regardless of amount. Invoices from that one vendor you’re always having problems with? Those go to CFO.
You can get pretty granular with this if you want. Most companies find two to three vendor-based rules work well.
Setting Up Approval Workflows
Q: How do we actually define our approval rules?
A: Start simple. Ask yourself: if I had to approve invoices myself, what would frustrate me? What worries me? Those are your rules.
Maybe you’re worried about invoices over ten thousand. Maybe you’re worried about new vendors. Maybe international invoices scare you. Those become your approval levels.Write them down. Document your logic. Then implement them. Don’t overthink it. Most companies find their approval rules in their first week of actually looking at invoices.
Q: Can we have different approval rules for different departments?
A: Definitely. Some companies route invoices based on cost centre or department. Marketing invoices go to Marketing Manager first, then Finance. Operations invoices go to Operations Manager, then Finance.
This gives each department visibility and control over their own spending. Works well for larger companies with department heads who care about their budget.
Q: What about approval timelines? How fast should approval be?
A: Ideally approvals happen same day. Realistically, most companies see approval within two to three days.
If approvals are taking longer than a week, you’ve got a process problem. Either your approvers are too busy, or you’ve got too many approval levels, or invoices are getting stuck in queues. Something’s broken.
One day approval is possible with email-based approvals and proactive approvers. Most companies aim for three days and are happy with that. Our Company Inbox system helps accelerate this through automated routing.
Q: What if an approver just keeps delaying?
A: This happens more often than you’d think. Someone’s busy, they deprioritise invoice approvals, and suddenly you’ve got a hundred invoices pending.
Good approval systems have escalation rules. If an invoice sits unapproved for three days, it escalates to the next level. After five days, it might go to CFO. This forces action instead of letting things languish.
Also helps identify which approvers are bottlenecks. Once you see the data, you can address it.
Q: Can approvers approve from anywhere or do they need to be at their desk?
A: This is why email-based approvals are brilliant. Approver gets notification, they’re on the train, they approve from their phone. Done.
Some companies use dashboards. Log in, see pending approvals, approve them. But honestly, most approvers prefer email. Simpler, they’re already in email anyway.
Remote approval is pretty much essential post-COVID. People aren’t always in the office. Your approval process needs to work wherever they are.
Invoice Approval Security and Control
Q: How do we prevent fraud through invoice approval?
A: Good approval processes catch a lot of fraud, actually. Not because approvers are fraud detectives, but because proper workflows surface suspicious invoices.
System flags duplicate invoices. Flags invoices from vendors not in your master list. Flags unusual amounts. Flags invoices that don’t match POs. These flags force review before posting.
Most fraud attempts fail at the approval stage because someone actually looks at them. That’s the control.
Q: What’s segregation of duties in invoice approval?
A: This is an audit term that basically means no one person should control the entire invoice process.
Person A shouldn’t be able to create a vendor, approve an invoice, and post it to GL all by themselves. You need at least two people touching each transaction. Auditors want to see that control built in.
Proper approval workflows enforce this automatically. Different people create invoices, approve them, and post them. One person can’t game the system alone.
Q: How do we prove to auditors that invoices were approved?
A: This is where immutable audit trails matter. You need logs showing who approved, when they approved, and what their decision was.
Email approval threads don’t count. They disappear. Email chains get deleted. Auditors need system records that can’t be altered. When they ask ‘show me evidence this invoice was approved,’ you show them the approval log. That’s proof.
Q: What if someone approves an invoice by mistake?
A: Good systems track this and allow reversal. Invoice got approved by mistake, approver can rescind their approval. It goes back to pending.
But here’s the thing: the original approval is still in the audit trail. Auditors can see it was approved, then approval was rescinded. That’s actually better than if it never was approved, because there’s a record of what happened.
Mistakes happen. What matters is having a trail so you can identify and correct them.
Approval in Practice
Q: What does actual invoice approval look like day-to-day?
A: Invoice arrives. System captures it. System validates it against your rules and your vendor master. If everything looks fine, it routes to the appropriate approver based on your rules.
Approver gets notification (email or dashboard). They review the invoice. If it looks good, they approve. System records their approval, posts the invoice to GL. Done. From invoice arrival to posted can be same day.
If something looks wrong, approver rejects it or requests more information. Requester provides clarification. Gets re-approved. Then posts. Whole thing takes two to three days usually.
Q: What happens if an approval is rejected?
A: Invoice goes back to the requester or back to the source. Depends on your process. Requester needs to figure out what the problem is and fix it.
Maybe invoice has wrong GL code. Maybe amount doesn’t match PO. Maybe it’s a duplicate. Once fixed, it goes back through approval process.
Some companies let approver put in comments like ‘GL code is wrong’ so requester knows exactly what to fix. Otherwise they’re guessing.
Q: Can one approver override another approver?
A: Depends on your setup. Some companies say if Finance Director approves, CFO can override that. Most companies say no, everyone’s approval stands.
There’s no right answer. Depends on your company hierarchy and how much you trust your approvers.
Q: What if the right approver is unavailable for weeks?
A: This is genuinely important to plan for. You need delegation rules in your approval system.
Finance Director going on holiday for two weeks? Invoices route to their deputy during that time. Their override approver. Once they’re back, it routes back to them. The system handles this automatically if you set it up right.
Q: How do we handle emergency approvals for time-sensitive invoices?
A: Sometimes invoices can’t wait. Supplier needs payment urgently. Your normal approver is gone. You need a process for this.
Usually means a designated alternate can approve with CFO notification. Or CFO can approve any invoice regardless of amount in emergencies. You define the exceptions upfront so people know what to do when it happens.
Q: Can we approve invoices by exception? Like, only flag ones that look wrong?
A: Some companies use exception-based approval. System posts invoices that look fine automatically. Only flags invoices with issues for approval.
This works if your system is smart enough to catch the problematic invoices. But most companies prefer explicit approval. Someone actually says yes instead of hoping the system caught everything.
Approval and Different Systems
Q: How does approval work with Sage invoices?
A: Sage has approval capabilities built in, but they’re not ideal for actual workflow. They require people to log into Sage to approve, which doesn’t happen.
Better approach is external approval system that handles approvals, then posts approved invoices to Sage. Approvers never need to log into Sage. They approve from their inbox. Invoices post automatically after approval. Available on Sage UK Marketplace and Sage Intacct Marketplace.
Q: How does approval work with Xero invoices?
A: Similar to Sage. Xero has AP approval but it’s inside Xero, which means approvers have to log in. Not practical.
A Certified Xero App can handle approvals externally, then post approved invoices to Xero directly.
Q: Can we match invoices to POs before approval?
A: Absolutely. This is actually part of good approval workflow. System checks if invoice matches PO before routing to approval.
If there’s a mismatch, invoice gets flagged. Approver sees the issue. They can approve anyway (maybe they authorised the change), reject the invoice, or request more information. Our PO Matching software provides complete control over how mismatches are handled before approval.
Approval Performance and ROI
Q: How do we measure approval efficiency?
A: Track a few things. Average time from invoice receipt to approval. Percentage of invoices approved first pass (not rejected). Number of invoices stuck in approval.
If average time is under three days and you’re approving 95 percent first pass, you’re doing well. If time is over a week or rejection rate is high, you’ve got process problems to fix.
Q: What’s the ROI on a proper approval workflow?
A: Two main benefits. First, fraud prevention. Proper approval catches duplicate invoices, fraudulent invoices, and errors before they post to GL. That saves money.
Second, speed. Once approvals are streamlined, invoices post faster. Cash flow visibility improves. Finance close happens faster. Less time chasing approvals means your team does strategic work instead.
Most companies see ROI within months from fraud prevention and time savings alone.
Q: How much faster do invoices post with a proper workflow?
A: Depends on your current baseline. If you’re currently using email approval and spreadsheets, proper workflow can cut approval time in half. From ten days to five days.
If you’re not doing formal approval at all (just posting everything), you’ll need to add approval time but you’ll gain fraud prevention and control.
Approval and Compliance
Q: What do regulators and auditors look for in approval workflows?
A: They want evidence that someone reviewed invoices before posting. Evidence means audit trail, not email threads that disappear.
They want segregation of duties. Different people creating invoices, approving them, posting them. One person can’t control everything.
They want documented policies. Here’s our approval policy. Here’s who approves what. Consistent application of that policy.
Q: Is email approval good enough for audit purposes?
A: Email approval can work if you archive it properly and keep those emails forever. But most companies don’t do that. Emails get deleted. Threads disappear.
System-based approval is better. Immutable records that can’t be altered. Auditors like that better.
Q: How long do we need to keep approval records?
A: Typically seven to ten years depending on your industry and if you’re audited. Some regulated industries need longer.
Most approval systems keep records indefinitely, so it’s not a practical problem. Just worth knowing what your retention requirements are.
Q: Can we show auditors our approval workflow?
A: Yes, you should. Most auditors want to see your approval policies, who approves what, and sample approval records for recent invoices.
If you’ve got good documentation and consistent audit trail, audit goes smoothly. If you’re doing approvals ad hoc with no documentation, audit becomes painful.
Getting Started with Invoice Approval
If you’re currently approving invoices via email or spreadsheets, it’s time to think about a proper workflow. Talk to us about how to set up approval workflows that actually work. Download from Sage UK Marketplace, Sage Intacct Marketplace, or the Xero App Store.
About This Article
These answers come from PaperLess Europe, an AP automation specialist working with over 1,000 companies to build invoice approval workflows that deliver control and speed. We’ve implemented approval processes across Sage 50, Sage 200, Xero, Orderwise, and SAP Business One.
Need help with invoice approval? Book a free demo or contact us.
Download PaperLess from: Sage UK Marketplace, Sage Intacct Marketplace, or the Xero App Store.
