Adopt eInvoicing and Approvals for Faster AP Processing

Home Blog How to use eInvoicing and automated approvals for rapid AP processing

Accounting efficiency tips

How to use eInvoicing and automated approvals for rapid AP processing

eInvoicing is creating a buzz in the accounting world – and for good reason. This technology has the potential to make invoice processing faster, more accurate, and secure. But what exactly is eInvoicing, and how can businesses use it in their workflows?

By Alex Keselman

10 min read •

February 07, 2023

In this article, we’ll take a look at the fundamentals of eInvoicing, its advantages for accounts payable (AP), and how pairing it with automated approval systems like ApprovalMax can bring even more efficiency and control to your financial processes.

What’s eInvoicing and how is it different from sending invoices by email?

It sounds pretty obvious: eInvoicing is sending and receiving invoices electronically, however, it doesn’t mean doing it via email with a PDF attachment. It is a far more efficient tool, and utilising it can make your invoice processing much simpler.

eInvoicing allows invoices to be sent straight from the supplier’s accounting system to the buyer’s accounting system. This means the buyer does not have to deal with it manually, and the supplier has an easier way of dispatching it.

All the invoices automatically show up as draft bills awaiting approval in the accounting system.

One benefit is that it’s platform-agnostic. That means the buyer and the supplier do not need to use the same accounting system. As long as both accounting systems use the global Peppol network, invoices can be exchanged no matter who you’re doing business with – no compatibility issues, no hassle!

How eInvoicing works in Xero

eInvoicing is included in all Xero subscriptions, so you don’t need to pay extra for it or purchase any additional services. However, you need to register to start receiving eInvoices. After that, all invoices you receive via eInvoicing automatically show up as a draft bill ready to be approved in Xero. This saves you time as there’s no need to enter bills manually, which reduces the risk of error.

As of January 2023, Xero offers eInvoicing in Australia, New Zealand, and Singapore, with plans to expand it into other countries.

Why eInvoicing is the future of accounting

The widespread adoption of eInvoicing is a gradual process and it is yet to be embraced globally. In countries where it is more common, adoption is still to go mainstream. For eInvoicing to reach its full potential, it’s crucial for governments, large corporations, and small businesses to acknowledge its benefits. Despite the slow growth, we firmly believe that eInvoicing is the future of accounts payable (AP) and accounts receivable (AR) for these reasons:

You’ll reduce the amount of manual data entry

When you receive a pdf in the email or a paper invoice, you need to open it and enter all the details into the accounting system. eInvoicing cuts out this manual entry, both saving valuable time and decreasing the risk of error.

Invoices will be paid faster

Since it’s easier to process an eInvoice, it’s much easier and quicker to pay them on time. The recipient gets a pre-populated bill, ready to be approved. If you’re dealing with hundreds of invoices, the time savings become immense. Moreover, some government agencies are already committing to faster payment times.

The cost of doing business is lowered

Even if you’re not sending any invoices or receiving only a few, switching to eInvoices can lead to significant savings. According to Deloitte, each time an invoice is delivered via eInvoicing network instead of email, it can save you up to $20.

Peace of mind with enhanced security

eInvoicing is more secure than sending documents via paper or email, because the invoice exchange happens through a secure network without any human interaction. It decreases the risk of fraud, as your documents end up exactly when they need to be.

Common misconceptions about eInvoicing

Despite its growing adoption, many businesses hesitate to use eInvoicing due to common misconceptions. Let’s address these myths:

“It’s only for large businesses”

Not true. eInvoicing is scalable and works just as effectively for small and medium-sized enterprises (SMEs). It helps businesses of all sizes save time and reduce costs.

It’s complicated to set up”

With platforms like Xero and ApprovalMax, setting up eInvoicing and a paperless approval workflow is straightforward and doesn’t require technical expertise.

“It’s not secure”

eInvoicing is more secure than traditional methods, as invoices are exchanged through a controlled network, reducing the risk of fraud or human error.

“It’s expensive”

While there’s an upfront investment in adopting new tools, the long-term savings in time, error reduction, and administrative costs far outweigh the initial expense.

How does ApprovalMax work with eInvoicing?

eInvoicing is a great way to send and receive invoices which potentially will get rid of the need for data entry tools, but what does it have to do with bill approvals?

If a business needs to keep tight control of its spending, the idea of invoices popping up in their accounting system without any human intervention may seem risky. When a bill needs to go through a round of authorisations, it is not possible to approve it directly in Xero. This is where ApprovalMax comes in!

When you use ApprovalMax with Xero and you receive an eInvoice, it arrives in Xero as a draft with the status of ‘Awaiting approval’. After this, ApprovalMax automatically picks up the invoice, waits for an approval decision, and then pushes it back to Xero with the status of ‘Awaiting payment’ when the approval process is complete.

ApprovalMax is the leading approval app in the Xero ecosystem for Xero bills. Adding it on top of using Xero’s eInvoicing functionality helps businesses and accountants save even more time and money.

For those using eIvoicing in Dext Prepare, ApprovalMax works just the same. It can pick up invoices both from Xero and directly from Dext Prepare if the direct integration is enabled.

Why combine eInvoicing and ApprovalMax

Pairing eInvoicing with ApprovalMax creates a robust paperless invoice approval system that delivers:

Improved efficiency

Automate repetitive tasks and free up your team’s time

Greater accuracy

Reduce errors by eliminating manual data entry and adding automated approval checks

Enhanced transparency

Maintain a full audit trail for all invoice approvals, ensuring accountability and compliance

Scalability

Easily handle increasing invoice volumes as your business grows

eInvoicing offers a secure, efficient, and scalable way to manage invoice processing. However, its full potential is realised when paired with tools like ApprovalMax, which add structure, control, and transparency to the process. Together, they form a comprehensive AP automation software solution that allows businesses to streamline approvals, eliminate manual errors, and save significant time and resources.

The future of accounting is here – and it’s digital. Whether you’re a small business, a growing enterprise, or an accountant supporting multiple clients, adopting eInvoicing and automated approvals is a step towards smoother accounts payable processes.

Can we use ApprovalMax if we’re not using eInvoicing yet?

Yes! ApprovalMax supports eInvoicing, but eInvoicing is not a prerequisite for using ApprovalMax. Thousands of businesses and accounting firms globally are using ApprovalMax as a smart and efficient solution for managing the approval process. It streamlines the process of approving invoices, expenses and other financial documents, saving you time and reducing the risk of errors. With ApprovalMax, you’ll be able to say goodbye to time-consuming manual processes and hello to effortless, stress-free approvals!

Alex Keselman, a Solutions Engineer at ApprovalMax, brings six years of experience and a solid IT background. He focuses on helping clients smoothly implement automation solutions by breaking down complex technologies.