AP approval workflow checklist overview

Read through the important points to consider as you set up AP approval processes.

Table of contents

When implementing an AP approval process for a client, the first step is to identify key pain points in their current workflow, including:

  • Bottlenecks in the approval process that lead to costly late fees.
  • Repetitive data entry that increases risk of human error and exceptions.
  • Unnecessary headcount that could be utilized elsewhere in the business.
  • Missing separation of duties, which can lead to fraudulent payments.
  • Poor document management or lack of clarity in the process.

In order to evaluate a client’s current workflow for common pain points, it helps to ask the right questions and map it out.

Refer to the AP approval best practices guide for more insight into each of the following questions.

Who is currently involved in the bill pay process?

What roles do they play and is there a clear separation of duties?

Are there multiple levels of approval needed based on the amount?

Have a discussion with the senior parties involved to determine what amounts should be approved by specific individuals.

Does your client have other approval policies for more complex routing?

Some businesses, especially those with multiple departments, require added approval process controls. This allows them to include relevant stakeholders, reduce fraud, and control cash flow.

How are vendors managed?

A client’s AP process also requires efficient vendor management, which includes obtaining and keeping up-to-date vendor records like contact information, tax information, contracts and payment terms, electronic payment authorization, and possibly more—based on industry. Ask your client about their current onboarding process for vendors and how documents are kept.

  • Is there an onboarding process for new vendors?
  • How are vendor documents collected and stored?
  • Who is responsible for managing vendor documentation?
  • Are W-9s collected for each vendor?
  • Is each vendor’s bank account information being collected for ACH?
  • Are these documents being handled in a secure manner?

How are payments disbursed?

Whether paid by paper check, bank wire, credit card, virtual card, or any other form of payment, all transactions have to be processed and recorded in detail to be reconciled later in the general ledger. Many business clients will use multiple forms of payment depending on each vendor’s payment terms, so this requires some serious organization to keep accurate records.

Is your client’s payables process susceptible to fraud?

Small business clients aren't always aware of the processes and workflows available to help mitigate risk as they pay bills and spend money. Here are a few questions you can ask to uncover possible fraud risks in their bill pay process.

  • Does the client consistently disburse payments via paper check?
  • How is check stock managed/stored?
  • Is there a clear payment workflow and separation of duties?
  • Who has access to company accounts and cash flow?
  • Does the client have any fraud prevention tools/technology in place?
  • How are sensitive documents being managed and who has access to them?

What’s next?

Now that you’ve identified some of the client’s key process pain points, it’s important to set goals for solving these challenges. You’ll need to measure where they are now versus where they want to be using key performance indicators (KPIs).

Using the information you’ve gathered, refer back to the AP approval best practices guide to begin evaluating the time and cost of their current bill pay workflow.

The information provided on this page does not, and is not intended to constitute legal or financial advice and is for general informational purposes only. The content is provided "as-is"; no representations are made that the content is error free.