Making invoice processing more effective with a simple description – FlowBoard

Making invoice processing more effective with a simple description

DECEMBER 11, 2018

In the course of the daily work you probably handle multiple vendor invoices. We tend to treat them as a matter of routine, however, our neglect can have a harmful effect on our company finances and its credibility.

There are two common problems with processing invoices in companies, regardless of their size or industry: (1) handing them over to the financial department too late, and (2) providing insufficient information about the invoice.

Making invoice processing effective in FlowBoard


People have a tendency to put off scanning and handing over invoices to the finance department, as it is not the main and most important thing they should be doing at the moment. Additionally, they know that invoices are not processed right away but in regular batches – 'I have time, I will do it later'. This results in holding documents too long and it might have serious consequences in the company finances and trustworthiness.

But sending invoices to the financial department in time is not enough. It is crucial to supply every invoice with a proper annotation. Usually, invoices are commented with a brief 'company expenses' footnote, without stating what is it for, and if it is linked to a purchase order. This generates unnecessary email correspondence, or worse – can result in assigning the cost to a wrong department, not including the cost in an investment (financial result) or not including it in company costs (higher tax).


Is e-mail the right solution for processing invoices?

The default way of processing invoices is still e-mail in most of the companies, as they archive digital versions of all documents. But keep in mind that emailing the document is only one step in the process. Documents often have to be annotated with details such as a PO (purchase order) number, a declaration which department should be assigned with its cost, if is it a part of an investment (which one, if so). Without a proper template, every email with an invoice might lack an important piece of information.

Later, the invoice might need to be inspected against the purchase order, so without the PO number, the accounts payable representative will probably wonder "what's this?" and delay the processing, as there is no proof that the order was placed. Supervising invoice processing gets really tricky and slow when managed through e-mail only, as the person who hands over the invoice often is left with no information on the status of their document.

Fortunately, invoice processing applications and workflow management systems like FlowBoard come to help. They facilitate the timely transfer of invoices between people and departments and make sure the documents have all the required information supplied. This enables you to make the right decisions based on credible data.


Making invoice processing effective

Managing invoice processing does not have to be complicated. You can take it to the next level with a little help - the right tool and good practices. Go through these three steps to make it happen.

1. Prepare a list of required invoice information

First of all, if your company uses PO numbers, this should be a number one position to fill in when sending an invoice. Think about the end result. If you want to have an accurate balance sheet, a brief description like 'sales costs' or 'equipment costs' should be enough.

If you need more detailed data, you may require the name of the department which ordered the product or service. With this information, you can compare the costs against the department's budget. You can add even more supplementary pieces of information, for example, costs based on location. This will help assess the results of your company branches..

Discuss the results with your colleagues. They might have additional requests for the required invoice information.

Required invoice annotation in FlowBoard data form.

2. Set responsibilities

Decide who should be making annotations on invoices and who should be verifying the accuracy of annotations. The main characteristics of this person should be accountability and attention to detail. Are there areas in your business that need particular attention? Consider adding a second-level information verification to reduce mistakes. You can also set a financial limit so that annotations on invoices above specified value need additional acceptance.

"Time is money", as Benjamin Franklin once said. Every activity related to invoice annotation and processing should have a defined time limit.

Invoice processing request with a responsible person and a due date (FlowBoard).

After setting responsibilities and time frame, the next step should be to write down the activities related to processing invoices in the correct order.

3. Constantly improve the process and introduce a workflow management tool

Dynamic changes and constant improvement of businesses make it necessary to reinvent the company foundations. Orientation to the market creates costs, so the changes must lead to the improvement of the invoice annotation policy.

You can extend the list of cost types with a few clicks in FlowBoard.

Remember, that the workflow management tool should simplify your daily work and not add another layer of complexity. Automatical assignment of tasks to appropriate employees and setting due dates is a must.


Why should you improve invoice processing – summary

Invoice processing is conducted slightly different in every company and not always is effective. Every business is prone to changes in its operation, but you can always improve the transferring and acceptance of invoices with a little help of a workflow management system. Only then invoices will be processed without errors and in time, and you will have credible data for informed decision making.

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