Automated Invoice Approvals with Hiring Managers
Liquid automates the invoice approval process — preventing errors and saving you time and money.
At most businesses, invoices usually go to accounts payable (AP) first to be coded and properly routed. AP has to manually check each invoice against the appropriate Work Order and Master Contract while coding the invoice appropriately. But before they pay it, AP might need to send it to the Hiring Manager for approval — and then to other specific approvers based on the size of the invoice or other company policies — before finally paying the invoice. It’s a manual process, which naturally invites lots of points for human error. Most companies using a manual approval process frequently pay duplicate or out-of-scope invoices as a result.
Benefits of automated invoice workflows
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Liquid automates the invoice approval process. If you have turned on invoice processing and approvals, each invoice is automatically assigned and digitally routed to the Hiring Manager first for approval before anyone else has to spend time on the invoice. The Hiring Manager is the person who will be closest to the work being done, so they will know best if the invoice represents the product that has been delivered.
Combined with the automated Invoice to Work Order matching that Liquid automatically does for each Invoice, this dramatically reduces the time spent reviewing invoices and significantly decreases payment errors. Our users report that Liquid saves them on average $12,000 each year from reduced errors in invoices and payments.
In addition, the automated invoice workflow frees the AP team from this tedious manual task. They don’t have to route it, and they don’t even have to look if rejected. Liquid does the coding and routing, saving lots of time for AP and Hiring Managers — and minimizing human error.
Setting up your invoice workflow
In Liquid, you can set a Hiring Manager for each Vendor. That Hiring Manager is then the default Hiring Manager for all Work Orders with that specific Vendor. In addition, in Settings —> Approvals invoices can automatically be routed to each Hiring Manager for approval. Alternatively, you also can specify a different Hiring Manager for each Work Order.
If automated routing to Hiring Managers it turned on, then the Hiring Manager for each Invoice is automatically an approver for that Invoice: that will be the Work Order Hiring Manager if the Invoice is tied to a Work Order, or the Hiring Manager for managing the relationship with the Vendor if the invoice is sent without a Work Order.
Once invoice processing is turned on, one or several Invoice Processors are selected (at least one person must be designated as an Invoice Processor). Companies usually add their AP person, accountant, or bookkeeper as an Invoice Processor.
An Invoice Processor is anyone that should be able to add additional approvals on any given invoice, as well as remove those additional approvers. Any approvers added on a specific invoice can be removed, but approvers added automatically via Approvals Settings cannot be removed from specific invoices.
Also, Invoice Processors can elect to get copied on emails as Invoices go through the approval/rejection process — or they can choose to save their inbox and opt-out of these emails. The important thing to note is that the Invoice Processors aren’t required to do anything to move an invoice along.
As always, only people set as Administrators, Controllers, and Invoice Payers (roles with permissions to pay Invoices) will be able to pay invoices.
How the invoice review and approval workflow works
Here’s how this works in real life. Let’s say your company has engaged with a consulting firm that is doing work with both your product team and your marketing team. You might set the overall Hiring Manager for that consulting firm to be the executive responsible for bringing in that Vendor. But then you might have the product lead and the marketing lead be the Hiring Manager for their respective team’s Work Orders. The accountant might be the designated Invoice Processor.
When an invoice comes in for the marketing team’s Work Order, the invoice will be automatically routed to the marketing lead. Similarly, when an invoice comes in for the product team’s Work Order, the invoice will be automatically routed to the product lead. And if an invoice from the Vendor is received without a Work Order, then it’ll be routed to the Vendor-level Hiring Manager.
If additional approvals have been triggered due to customized approvals set at specific invoice amounts, then the invoices would also get routed automatically to those people. And if any additional approvals are needed, the Invoice Processor can add them at any time. Any of these approvers will be able to reject the Invoice with a comment. This invoice rejection then notifies the Vendor via email with the comment included. And if all approvers approve the invoice then it can be paid. Additional approvers can be added on any invoice before payment has been initiated or scheduled.
Adding more flexibility and customization to automated workflows
Coming soon, we’ll also be introducing Work Order Processing. This will allow you to implement flexible and customizable approval processes for Work Orders, as you are familiar with for Invoices. You’ll be able to automatically have the Vendor level Hiring Manager approve any Work Orders as well as add any additional customized Work Order approval processes.
Still have questions about automated workflows in Liquid? Use the chat to reach out to us anytime!
Updated: March 15, 2021