Payment Approval Automation

1. Payment Approval Automation Payment authorization is a very critical process for any entity. As simple as it may sound, several enterprises still don’t have adequate governance around this process and audit trails are typically hard to find. Most large enterprises have a process to approve payments by the respective line of authority before a payment run is initiated in the ERP or any digital system. Typically, this entails the preparer to create a note with relevant attachments and sending to the right signing authority for approvals. The approver then needs to check if expense is valid against cost center, verifying all the attachments and approving / rejecting with comments.

2. The accounts payable team confirms that all requisite approvals are completed prior to completing the payment run. The approval process and payment run process must be tied, and payment runs should ideally be disabled unless approvals have been received. In most enterprises, this process is manual in nature, ridden with several errors. Given that approvers are either signing on physical documents or are approving over email, audit trails are difficult to find. Any comments provided during approval are difficult to trace unless there is a search done on individual email folders. Supplier experience and relationships could be impacted due to payment delays resulting from a tedious, labor intensive process. Enterprises are increasingly looking to automate this process. Together with ERP integration, they are looking for a solution whereby the approval requests together with attachments can be uploaded; workflows for approval are automatically routed to the right approvers. Third Party Management Software plays a vital role here. They allow approvers evaluate the supporting attachments, comments from prior approvers if any, request addition al information, reject or approve the workflow. Eventually, the payment run is tied in with the respective approvals. There is full visibility to the process, information available on where an approval lies at any time, productivity of people and how long a process took. Automating this process yields significant business benefits due to resultant process efficiencies, visibility, reduction in errors and frauds and better governance. Business teams are no longer chasing approvals, and spending time trying to find where an approval lies. It not only fast pace project execution but also takes care of compliance and risk management.

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