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How to Automate & Accelerate Your Invoice Approval Workflow

Anna Ni Chiaruain Anna Ni Chiaruain 04/12/2019
How to Automate & Accelerate Your Invoice Approval Workflow
Anna Ni Chiaruain Anna Ni Chiaruain 04/12/2019

Open the bill, check for errors, forward to Finance, repeat.
Invoice approval is one of those tedious legal operations tasks you just *can’t avoid.

*Well, that’s not entirely true.

With a few savvy adjustments, you could design an invoice approval workflow that automates away much of your burden and accelerates the remaining responsibilities.

Learn how in the blueprint below.

Gather Your Tools

You can only operate so fast when tired eyes and an overbooked brain are the sole items in your toolkit. So the first thing to do is recruit a few critical reinforcements.

Documented Billing Guidelines

We'll discuss a few digital innovations later on, but this low-tech resource is where it all begins. Without clear, written rulings on which billable services are acceptable, each new invoice could trigger a new debate with your outside counsel. And looking forward, any automated invoice review software you adopt will need standardized criteria to reference when making compliance decisions.  

So make sure your stance is settled before you start fine-tuning your technology. (Here are some sample legal billing guidelines if you’d like a benchmark.)

E-Billing Software

Envelopes and emails aren’t the delivery vehicles of choice among efficient legal departments. Instead, you’ll see them inviting their law firms to submit invoices through a shared digital platform.

Adopting e-billing software immediately removes “lost in the mail” and “slipped into the spam folder” from your list of potential delays. And more importantly, it introduces some powerful new efficiencies into the invoice approval process.

Modern e-billing solutions can now automatically apply your legal billing guidelines against the invoices they receive, flagging errors and anomalies for further review. Adding this new screening layer alone has already cut review time in half for many corporate legal teams. (And we’ll discuss the right way to configure it momentarily.)

AP Integration

The workflow doesn’t end with confirming the correctness of an invoice. The stated services need to be processed and paid for before you can cross the item off your to-do list. That means bringing your Accounts Payable (AP) function into the conversation.

This connection used to be forged by simply forwarding emails. But as we said earlier, you don’t want to be dependent on anyone’s inbox hygiene. The best e-billing software accelerates this final leg of the invoice approval workflow by creating a direct integration to your finance team, ensuring quick and compliant payment. 

Set Your Rules

An e-billing solution that applies your guidelines and integrates with your finance tools is the ideal foundation for faster invoice approval. But to accelerate work without diminishing accuracy, you’ll need to point your technology in the correct direction by establishing the right rules.

Automatic Rejection

Some invoices are so obviously non-compliant that they don’t even deserve a mouse click. Missing descriptions, insufficient narrative detail, and unauthorized block billing, for example, are common traits of invoices destined for immediate rejection and return. They’re also elements that your e-billing software can detect and address before they reach your desk. 

You’ll have to decide for yourself what fits the description of an egregious error, but automatic rejection is a mechanism most teams can apply toward at least a few safe scenarios. 

Automatic Approval

At the opposite end of the spectrum, there are legal invoices you could blindly approve with little chance of future regret. The common denominator in this category is typically cost.

For example, you might decide that invoices which pass your e-billing system’s initial guideline check AND total less than $500 can be automatically routed to your AP system. Alternatively, you might decide that any line item less than $100 isn’t worth arguing about with your most trusted law firm.

Automatic Review

Some issues are too sensitive to rely entirely on technology. As a result, you might also consider programming your e-billing software to send certain invoices your way even if they pass automated compliance checks.

Examples from this category tend to include invoices that exceed a certain budget threshold or those associated with particularly important matters. (As you’re refining your definition of which scenarios demand human review by default, it’s probably best to play it conservative and err on the side of additional scrutiny.)

Study Your Results 

The combination of clear guidelines and automated processes outlined above is certain to deliver serious improvements for most teams. The unexpected benefit of adopting this type of invoice approval workflow, though, is the feedback it naturally generates. Processing all activity in a centralized digital environment gives you a powerful data advantage. 

You’ll be able to confirm exact turnaround times and monitor progress objectively. You’ll be able to identify common violations and instruct law firms accordingly. You’ll be able to see your human review rate and refine your automation rules strategically.

Simply put, a continuously improving invoice approval process is now within reach. 

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See our webinar below to learn what automated invoice review looks like in action.