Many finance professionals know that invoice approvals can drag on for weeks, becoming a constant headache in their day-to-day work. Are all the invoices accounted for? Were all the details entered correctly? Will the department manager be able to approve due invoices on time? These are the questions accountants find themselves asking while racing to meet tight payment deadlines.
Cloud-based solutions can effectively address many concerns faced by finance teams. By automating most tasks associated with invoice processing and transitioning invoice approvals to the cloud, AP clerks and accountants can save up to 80% of their time and effectively extend important payment deadlines.
In this blog, we’ll explore what cloud-based invoice approvals are and how they can achieve greater speed, accuracy, and peace of mind for everybody involved. Let’s dive in!
Key Takeaways
- Cut processing time by up to 80% by digitizing invoice submission, automating data extraction, and routing approvals instantly to the right person.
- Eliminate manual errors with OCR technology that matches invoices against purchase orders and flags discrepancies before payment.
- Avoid delays by setting up backup approvers, escalation rules, and automated reminders for overdue invoices.
- Boost compliance and audit readiness with secure, GDPR-compliant storage and a complete log of all invoice actions.
- Save costs by reducing labor hours, preventing late payment fees, and capturing early payment discounts.
- Integrate smoothly with accounting and ERP tools like Xero, SAP, and NetSuite to eliminate double data entry.
The Problem With Traditional Approval Process
It’s well-known among finance teams that manual invoice approvals are often slow and overly complicated. In most companies, invoices come through email or physical mail, requiring manual sorting and data entry to the bookkeeping system or Excel sheet – a process that often leads to mistakes, such as typos or missing information.
Additionally, verifying all invoices against purchase orders adds another layer of complexity, particularly when the supporting documents are incomplete, mismatched or of poor quality.
The approval process itself is no smoother. Relying on email chains or physical sign-offs often leads to delays, especially if key approvers are unavailable in the office or out sick. These inefficiencies could add up, causing late payments, extra fees, and damaged relationships with crucial vendors.
As invoice volumes grow, manual systems have no choice but struggle to keep up. It becomes harder to track where each invoice is in the process, creating confusion and making external and internal audits time-consuming and stressful. For businesses aiming to scale, this outdated way of working is simply unsustainable.
What is a Cloud-Based Invoice Approval?
A cloud-based invoice approval system is a digital tool that simplifies the processing, approval, and storage of vendor invoices. With cloud computing, users can eliminate paper and spreadsheets, as data is stored remotely and is immediately accessible through a network (“the cloud”).
While cloud services typically require internet access, they provide an efficient invoice management software incomparable to tedious manual procedures. Here’s how the typical cloud-based invoice approval process works:
- Invoice Submission: Vendors or employees upload invoices directly to the invoice approval platform.
- Data Extraction: The system uses Optical Character Recognition (OCR) to scan and capture essential data, including the vendor’s name, invoice amount, and due date.
- Validation: The invoice data is automatically verified against purchase orders, contracts or delivery notes.
- Approval Routing: Once validated, the system routes the invoice to the appropriate approvers based on predefined workflows. An authorized person receives notifications and is able to immediately review invoice through his phone or web application.
- Payment Scheduling: After approval, the invoice is sent to the payment system, where payment dates are scheduled and tracked. Integration with your accounting software ensures a fast transition from approval to payment.
- Audit and Reporting: All actions are logged automatically, creating a clear audit trail and providing insights through real-time reporting dashboards.
As the process shows, a workflow using automation and cloud-based solutions significantly reduces manual input compared to traditional approval processes. This shift reduces the time, costs, and risks at each step, while also offering many other benefits unique to cloud-based invoice management systems.
The Advantages of Cloud-Based Invoice Approvals
Choosing to work with cloud-based invoice approvals is not a trend but a necessity for growth and enhanced productivity within your team. Let’s explore the biggest advantages of cloud-based systems:
Speed and Efficiency
In a manual approval process, an invoice can remain in a manager’s inbox from several days to several weeks. With a cloud-based solution, invoices are automatically routed to the appropriate approvers, and notifications are sent directly to their mobile or web apps.
If an approver is unavailable, the system can redirect the task to an alternate approver, guaranteeing no delays in pressing payments. Additionally, features like automated data extraction eliminate the need for manual entry, significantly reducing invoice processing time.
Cost Savings
Beyond labor savings that typically consume 62% of total AP costs, cloud-based systems help accountants minimize late payment fees and take advantage of early payment discounts.
For example, a vendor may offer a 2% discount for payments made within 10 days. With automated reminders and faster processing, finance teams can capitalize on these discounts, accumulating significant savings over time.
Error Reduction
Even the smallest errors in manual data entry, such as mistyping an invoice amount or date, can lead to critical payment delays. Cloud-based systems use OCR to extract data directly from invoices and cross-verify it against purchase orders, contracts or delivery notes.
For example, if a vendor’s invoice claims $2,000 but the purchase order is $1,500, the system will flag the difference for an additional review, protecting your company from potential overpayments.
Improved Visibility and Control
For accountants who manage dozens to hundreds of invoices, it is crucial to know the exact status of each invoice. A cloud-based dashboard shows real-time data, allowing you to see which invoices are pending, approved, or overdue. With this feature, finance teams can quickly identify and prioritize high-value invoices during periods like month-end closing to ensure accurate financial reporting.
Compliance With Regulations
For most businesses, compliance with tax laws, data privacy regulations, and financial standards is non-negotiable. Cloud-based systems provide built-in tools to simplify compliance with:
- Tax Compliance: Features like VAT or GST tracking ensure invoices align with regional tax laws. EU businesses benefit from automated VAT validation, reducing the risk of errors during tax filings.
- Data Security Standards: Compliance with regulations like GDPR (General Data Protection Regulation) and HIPAA (Health Insurance Portability and Accountability Act) is made easier with encrypted data storage and access controls. Accountants can assign specific user roles to ensure that only authorized individuals can access sensitive financial information.
- Audit Readiness: Cloud systems keep a detailed audit trail of all invoice-related actions, including who approved, modified, or reviewed them. This makes compliance audits significantly easier. Instead of searching through emails or paper files, auditors can quickly access a centralized record just in seconds.
Scalability for Growth
As businesses expand, managing invoices becomes increasingly complex. A small start-up that processes 500 invoices monthly may find itself handling 2,000 invoices within a year. Cloud-based platforms can accommodate this growth without requiring additional IT infrastructure.
Flexibility and Remote Access
Cloud-based solutions allow accountants to manage invoices from any location at any time. This means they can approve payments from their phones or review reports while traveling. During a remote audit, a CFO can access pending approvals and ensure that deadlines are met without being in the office.
Integration With Accounting Tools
Many modern cloud-based platforms are designed to integrate with widely-used accounting and ERP systems such as QuickBooks, Xero, and SAP. This way, when an invoice is approved, the system can automatically update the accounts payable ledger in QuickBooks, eliminating duplicate entries.
This seamless data flow ensures real-time financial updates, significantly reducing the effort required for reconciliation during busy periods like year-end closing.
How to Reduce Invoice Processing Time With Cloud-Based Approvals
You can cut invoice processing time by up to 80% by moving to a cloud-based approval workflow that automates data capture, validation, and routing.
1. Digitize All Incoming Invoices
Paper invoices and emailed PDFs create delays and make tracking harder. Moving all vendor submissions into a secure, cloud-based platform ensures documents appear instantly in the accounts payable dashboard, ready for processing without manual sorting or scanning.
2. Automate Data Extraction & Validation
Manual data entry is slow and prone to costly mistakes like incorrect amounts or dates. Using OCR technology key invoice details such as vendor name, amount, and due date are captured automatically and matched against purchase orders to flag discrepancies before they cause payment delays.
3. Create Approval Workflows
Waiting for email-based sign-offs can stretch processing times from days to weeks. Cloud-based systems let you predefine workflows so invoices are instantly routed to the right approver based on department, budget threshold, or vendor type. You can also assign backup approvers to keep things moving if someone is unavailable.
4. Integrate With Accounting & Payment Systems
Manually re-entering invoice data into ERP or accounting software wastes time and risks duplication. By integrating your approval system with platforms like Xero, NetSuite, or SAP, approved invoices update the ledger automatically and move straight into payment scheduling.
5. Use Automated Reminders & Escalations
When managers are busy, invoices can sit unapproved for days. Automated reminders help approvers act quickly, and escalation rules ensure overdue invoices are rerouted to alternate approvers before deadlines are missed.
6. Monitor and Optimize With Dashboards
Without visibility into the process, bottlenecks go unnoticed. Real-time dashboards show where every invoice is in the workflow, highlighting delays and high-priority payments so finance teams can act immediately.
7. Ensure Compliance & Audit Readiness
Faster approvals shouldn’t compromise compliance. Configuring tax rules, GDPR permissions, and access controls in your cloud system ensures every step meets regulatory requirements.
Replacing manual steps with automation, standardized approval routes, and system integrations allows finance teams to cut invoice processing time from weeks to days, while reducing errors, improving compliance, and freeing up capacity for strategic work.
Real-Life Example: How CROP Reduced Invoice Processing Time with Cloud-Based Approvals
CROP Accountants & Advisors, a consultancy firm with over 320 employees across five branches, faced significant delays and errors with its manual invoice and expense claim processes. Invoices were mailed between offices for approval, often taking up to three weeks, while VAT errors and bulky expense reports added to the administrative load and exhausted the team.
By implementing the cloud-based solution Klippa SpendControl, CROP digitized and automated its financial workflows. Employees now submit expense claims via an app, with VAT automatically processed, while invoices follow predefined approval routes and are seamlessly integrated into Exact Globe.
Key Results:
- Invoices are now approved within days instead of weeks
- Automated VAT calculations and workflows minimize mistakes
- Scalability: Administration hours remain unchanged despite significant growth
- A real-time dashboard provides full oversight of invoices and expense claims
By implementing cloud-based invoice processing, CROP simplified its operations, reduced costs, and improved both efficiency and employee satisfaction. This noticeable change highlights the tangible benefits of cloud-based invoice approval systems.
Process your Invoices with Klippa SpendControl
Whether your team is struggling with missed deadlines, inconsistent workflows, or simply wants to work smarter, transitioning to cloud-based invoice approvals is a practical and impactful solution. It’s not just about speeding things up – it’s about empowering your finance team to focus on what really matters!
Cloud-based invoice approval systems like Klippa SpendControl can simplify invoice processing tasks and take away the pressure off your finance team. By delegating manual tasks to automation, your team will be able to slash invoice processing time, reduce errors, prevent fraud and stay compliant with relevant policies.
Klippa SpendControl offers core features that will enhance your invoice approvals in no time:
- Manage your vendor invoices, employee expenses, and business credit cards in one cloud-based platform
- Submit, process, and approve invoices via web or mobile app
- Achieve 99% invoice data extraction accuracy with Klippa’s OCR
- Regain control over your accounts payable with intuitive dashboards
- Customize your approval management with multi-level authorization flows
- Never fail to comply with tax and data privacy regulations with our ISO27001-certified and GDPR-compliant solution
- Rely on automatic multi-currency support for international payments
- Prevent invoice fraud with built-in duplicate and fraud detection
- Integrate SpendControl with your accounting and ERP software, like Xero, NetSuite, or SAP
FAQ
Most finance teams reduce processing time by 60–80%, depending on invoice volume and current workflow. For example, CROP Accountants cut approval cycles from three weeks to under three days using Klippa SpendControl.
2. Is cloud-based invoice approval secure?
Yes. Leading solutions like Klippa SpendControl use ISO27001-certified frameworks, GDPR-compliant data handling, encryption protocols, and role-based access controls to ensure sensitive financial information stays secure.
3. Can I integrate cloud-based approvals with my existing accounting system?
Yes. Most modern platforms integrate with tools like Xero, SAP, NetSuite, and QuickBooks. In Klippa, once an invoice is approved, it updates your ledger automatically and moves into payment scheduling without manual re-entry.
4. Do I need to scan paper invoices?
If your vendors still issue paper invoices, you can scan them and upload to the cloud platform. OCR technology captures the data automatically, eliminating manual typing.
5. Will automation increase compliance risks?
Automation reduces compliance risks by applying rule-based validation, securely storing documents, and maintaining a complete audit trail of all actions. This makes tax reporting, GDPR compliance, and audits simpler.
6. How can cloud-based approvals reduce costs?
Cost savings come from fewer labor hours spent on manual entry, eliminating late payment fees, and taking advantage of early payment discounts. In many cases, automation also prevents overpayment by flagging mismatches.