Optimizing Efficiency and Control: Mastering Xero Approval Workflow
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When you think of boosting your bookkeeping practices for your small business, digital automation always comes to mind. Studies show that using cloud accounting software can reduce your business costs by up to 50% and dozens have already filled the market with overwhelming choices. (1)
Xero is one of the most popular choices when it comes to reliable accounting software, and if you are already using this system, the next step is to find the best way to improve your Xero approval workflow.
In this article, we’ll guide you in preparing and implementing approval workflows that will work best with Xero.
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Why do you need approval workflows?
An efficient approval workflow does not only answer audit trail compliance. It also creates a positive ripple effect on your AP team and your business including:
- Increase productivity by simplifying all your paper and online invoices stored in multiple folders and files
- Decrease errors made with manual data entry through automation
- Create transparency in approval automation to monitor where your request is
- Improve overall accounts payable process by executing hassle-free payments
To maximize and thoroughly enjoy these advantages, it is essential to equip yourself and your team with the know-how when it comes to effective Xero approval workflows. (2)
Setting up your Xero approval workflow
Once you have logged in to your Xero account, you need to recognize who will approve what by adding managers, accountants, and department heads involved in the approval workflow.
Identifying roles and permissions
Users can be assigned as users, approvers, and admins. Identifying the roles makes it easier to know who can enter, edit, decline, and approve. Approvers and admins can also see other expenses, take necessary actions, and generate reports.
Can budget holders approve directly or do they have to go to the accounting head first? Users can be assigned defined approver levels to approve sales, and purchases, payments, reports, payroll, or justan FYI to view them.
Assigning rules and conditions
Within Xero Organisation, categorization can be done once you have assigned the users. Rules can be set if the figures are for spending, receiving, or transferring so Xero can get the necessary information and put it in proper lines.
Conditions can also be set up to fulfill the automation process that your business demands. This includes setting what condition must be met, then instructing what Xero will do once the condition has been met.
Implementing approval workflow
After setting up your Xero approvals, you can execute your invoice, bills, POs, and claims approval processes.
Invoice approval workflow
For single invoice approval, the invoice is then transferred to the Awaiting Payment tab after selecting the invoice you want to approve. For approving multiple sales invoices, simply go to the Drafts tab in Invoices and select the checkbox you want to approve.
Once approved, the accountant and bookkeeper’s estimated billings and work in progress (WIP) is updated, and updating the approved transaction’s description and date can be done here as well.
However, you can’t edit any financial information anymore once it’s approved. So if the data encoded is not yet finalized, you can save it as a draft first and approve them later.
Bills and purchase order approval workflow
For company bills, you can easily add a new bill and Xero will automatically notify you if there is an existing duplicate bill already. You can also opt to assign billable expenses to a customer or assign expenses to a project.
You can select one or more bills to pay under the Draft tab to review and make necessary changes before approving them.
Purchase orders approved in Xero are can be created to a bill or an invoice. Once submitted for approval, the approver can view them in Awaiting Approval tab and may be approved all together with other pending POs.
Expense claim approval workflow
Oversee, approve, or deny a claim request approval in Xero. Once a user is granted permission, they can initiate employee reimbursement by viewing and selecting an expense claim. To review the details, simply click on the expense line before approving.
Approved claims are moved to Awaiting payment which is then paid in the Bills tab. If you are declining an expense claim, be sure to add a note so the submitter will know the reason for disapproval.
Tracking and monitoring approval requests
Tracking and monitoring requests can be easily done by:
- Add bills and record payments so you can view and take action on pending approvals
- Check the approval status and requests pending for bills and transactions by sorting paid and unpaid and different viewing options
- Monitor overall expenses with bills and invoice summary reports
Efficient Xero Approval process with ENVOICE
Envoice lets you connect your Xero account so you can get a more cost-efficient and accurate approval workflow for you and your team. (3)
Use Envoice top-of-the-line technology to capture your accounting data, standardize tasks, collaborate, and facilitate payments, all in one app. Save time and effort knowing everything is integrated with your Xero account.
Workflow automation integrated with Xero
Extract data from financial documents accurately so you can send and submit for verification and approval immediately. After approval, Envoice automatically syncs sales invoices to your custom workflow so you can send out payments in just a few clicks.
Seamless team and task management
Creating tailored approval levels can also be done in Envoice so you don’t need to set it up and invite everyone again in Xero. Recurring tasks and monthly invoices can also be scheduled so you don’t miss another due date again.
Accessible anytime from anywhere
Use Envoice mobile app when you’re on the go, check it from your desktop at the comfort of your own home, or while on vacation. Your approvers are notified by email so they can track, review, comment, and approve requests conveniently.
- – Xero.com
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