Purchase invoice workflow monitoring in four steps
Financial Directors can, at any time and at any stage, view all received documents, regardless of the document entry point (which is especially important in the case of multi-branch companies) and their whereabouts (which facilitates purchase control and management if the Financial Director works remotely).
The electronic workflow of purchase documents may proceed in the following manner:
| Step 1 | Reception | Upon the receipt of the purchase document the person responsible for incoming correspondence (secretarial office) registers basic information concerning the said document (and attaches its scanned copy), initiating the workflow by designating a person responsible for the description or approval of the purchase. |
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| Step 2 | Description | The person designated as responsible for the description of the document shall be notified by e-mail about the list of documents awaiting description.
If the describing person has no authority to approve the final document, the appropriate person must be designated. |
| | | The document being described may be rejected with appropriate commentary by the describing person, e.g., on the basis of improper assignment. The document then returns to the registering person. |
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| Step 3 | Approval | The person approving the purchase (assigned to the document in the workflow) shall be notified by e-mail about the list of purchase documents awaiting approval.
At this stage the person approving the document should verify its description — if it has been previously added — or add a new one.
Approval means a change in the status of the document (into approved, ready to be posted) and possibly adding a description. |
| | | If the workflow of the purchase documents is integrated with a controlling solution, then the person responsible for document approval should fill in the data related to the allocation of costs to the appropriate budget. By doing this, the person also approves the cost associated with the respective responsibility center and the use of the budget. |
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| Step 4 | Accounting | Upon registration of the document in the workflow it becomes visible along with its current status for the accounting office (which allows for monitoring of the documents’ approval status).
An accountant receives via e-mail a list of approved documents that are ready to be posted.
When the document is verified in terms of formal and tax law compliance, and when any additional information is filled in, the accountant automatically posts the document.
If the document is incorrectly described or recorded, the accountant may reject it, adding an appropriate commentary (addressed to the person responsible for the document’s approval). |
The introduction of electronic workflow of purchase documents reduces the cost of interest on liabilities:
- by netifying the purchase process and related documents, which shortens the document approval process;
- by streamlining and automating the posting of purchase documents;
- which affects the planning of timely repayment of obligations and avoiding interest on arrears.
The introduction of electronic workflow of purchase documents allows to plan the financial means required to maintain solvency:
- the ability to track contracted company expenditures and liability settlement times is vital for company cash flow management;
- documents registered without delays mean that the company may include cash levels in expense planning and plan the amount and the repayment date for fixed deposits.
Controlled purchase document workflow allows for the reduction of fiscal costs:
- there should be no delay in the VAT documents accounting registration, on the basis of which VAT deduction is carried out (the document’s date of receipt determines the period of deduction, while the delayed posting of the document may lead to the forfeiture of the right to deduct VAT, or the necessity of making amendments).
The application of purchase documents workflow solution allows for the reduction of administrative costs:
- associated with accounting for and searching for misplaced documents (caused by the lack of information concerning who and where keeps a given document);
- associated with obtaining from the contractor a copy of the document in the event of its loss;
- by eliminating the need of photocopying external documents and using copies during the process of purchase approval.
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