Table of contents7 sections
A cost invoice lands in an employee’s inbox, is then forwarded to a manager, to accounting and to the person responsible for payment. After a few days it is hard to tell who approved it, what the expense is for and whether the document has already been paid.
Trying to keep full control often leads to elaborate procedures. A process that is too simplified, on the other hand, increases the risk of unauthorised costs, duplicate payments and budget overruns.
The solution is a clear and, as far as possible, automated expense workflow.
Why does expense approval take so long?
The most common problem does not come from the decision itself, but from the lack of information needed to make it.
The approver has to establish:
- what the expense is for
- who ordered it
- which project it is linked to
- whether it was agreed beforehand
- whether it fits within the budget
- when it has to be paid
If the data sits in messages, spreadsheets and different systems, every invoice requires additional questions.
How to organise the approval process?
Define the cost owner
Every expense should have a person assigned who is responsible for its validity and can explain why it was incurred.
Thanks to this, the invoice does not circulate around the company looking for the person who ordered the service or product.
Set approval thresholds
Not every expense needs approval from management.
The company can set different rules depending on:
- the amount
- the cost category
- the department
- the project
- the type of supplier
A standard, recurring cost can be approved faster than a new, unplanned purchase of high value.
Link the expense to the budget
The approver should see straight away whether the cost fits within the plan.
The invoice value alone is not enough. It also matters how much the company has already spent in a given category and what further commitments are planned.
Introduce clear statuses
Every document should have an unambiguous status, for example:
- for verification
- awaiting approval
- approved
- rejected
- awaiting payment
- paid
This makes it possible to quickly check what stage an invoice is at and who should take the next action.
How to speed up the process without giving up control?
The best process is not one in which a single person approves all expenses. It should automatically route the document to the right employee and give them the complete data.
Approval is faster when the system shows in one place:
- the source document
- the supplier’s details
- the amount and payment due date
- the cost category
- the expense owner
- the linked project
- the available budget
- the history of earlier approvals
Thanks to this, the decision does not require searching through email or exchanging extra messages.
How does Administy support expense approval?
Administy organises cost invoices and lets you assign them to a specific person, project and cost category.
The system makes it possible to:
- specify the cost owner
- route the document for verification
- control the approval status
- assign the invoice to a project
- compare the expense with the budget
- monitor the payment due date
- check whether the document has been paid
- analyse costs by category and supplier
Thanks to this, the people responsible for approval receive complete information in one place. Accounting does not have to establish who ordered a given expense, and the business owner keeps control over which costs are approved.
What does the company gain?
An organised approval process makes it possible to:
- approve valid expenses faster
- reduce the number of messages and questions
- avoid payment delays
- reduce the risk of unauthorised purchases
- control budget overruns
- assign costs to projects more easily
- keep the cash flow forecast up to date
Control does not have to mean extra forms and a multi-step procedure. It should result from access to the right data and clearly defined responsibility.
Summary
Fast expense approval requires, above all, an organised process. Every cost should have an owner, a category, a link to a project, a defined status and a clear approval path.
Administy gathers this information in one place and links the approval process with budget control and payments. Thanks to this, a company can handle cost invoices more efficiently without losing control over expenses.
A document sits in an inbox for a week not because nobody wants to approve it, but because nobody can see it.
