What is invoice approval?
Invoice approval is the step in accounts payable where an authorized person confirms that a supplier invoice is valid and should be paid. An invoice approval workflow decides who that person is, what they need to see, and what happens next.
Approval is where invoices most often get stuck. The invoice has been captured and checked, but it now sits in a manager's inbox, waiting. The approver doesn't have the purchase order to hand, isn't sure whether the goods arrived, and puts it off until they have time to look into it. Meanwhile, the due date gets closer and AP starts chasing.
Good invoice approval software fixes this by doing the preparation for the approver. By the time an invoice reaches them, it has already been through invoice processing and three-way matching, so the only question left is the one that genuinely needs a person: should we pay this?
What a good invoice approval process does
- Routes to the right person: based on amount, department, vendor or PO, not guesswork.
- Brings the context: the invoice, the PO, the receipt and any discrepancy, side by side.
- Makes the decision easy: approve, hold or query in one step, with everything in one place.
- Enforces controls: segregation of duties and approval limits applied every time.
- Records everything: who approved what, when, and why, as it happens.
The invoice approval process, step by step
Here's how an accounts payable invoice approval process runs from start to finish, and where Leveled takes the manual work out.
Invoice received & captured
Leveled reads the invoice from your AP inbox, and AI-powered OCR extracts every field and line item.
Matched & validated
Each line is checked against the PO and goods receipt, and duplicates are flagged. Clean invoices can move straight through.
Routed to an approver
Invoices that need a decision go to the right person, with the matching result and any discrepancy already explained.
Approved, held, or queried
The approver replies in plain language (approve, hold, approve part, or ask a question) right in the invoice's thread.
Controls enforced
Segregation of duties is checked on every approval: whoever prepared the invoice can never be the one who approves it.
Queued & recorded
Approved amounts are queued for payment, held amounts stay open, and the whole exchange is kept as the audit record.
How to design an invoice approval workflow
The best invoice approval workflows are simple enough that everyone follows them, and strict enough that nothing slips through. Most are built from a handful of routing rules.
Route by amount
Set approval limits so small, matched invoices need little or no sign-off, while larger amounts go to more senior approvers. Keep the number of thresholds small. Every extra tier is another place for invoices to wait.
Route by department or cost center
The person who owns the budget is usually the person best placed to approve the spend. Route invoices to the budget holder for the department or cost center they're charged to.
Treat PO-backed and non-PO invoices differently
An invoice that three-way matches a purchase order has effectively been approved already, when the PO was raised and the goods were received. Non-PO invoices (utilities, subscriptions, one-off services) haven't, so they need an explicit approval.
Decide what happens when approvers don't respond
Every workflow needs a plan for vacations and busy weeks: reminders, a back-up approver, and escalation before the due date. Otherwise the workflow is only as fast as its slowest approver.
Separate preparing from approving
Whatever your rules, the person who enters or prepares an invoice should never approve it. This is the core of segregation of duties, and it should be enforced by the system, not left to good intentions.
A sample invoice approval matrix
An approval matrix sets out who approves which invoices. Here's a simple example of the kind of structure many finance teams start with. Adjust the thresholds and roles to fit your own policy.
| Invoice type | Who approves | Notes |
|---|---|---|
| PO-backed, fully matched | No further approval, or AP confirms | The PO and goods receipt already represent approval of the spend. |
| PO-backed, with an exception | The PO owner or budget holder | They decide whether to accept the difference, approve part, or hold. |
| Non-PO, below your lower threshold | Department manager | Routine spend such as subscriptions and utilities. |
| Non-PO, above your lower threshold | Department head, then finance | Two approvers for larger, unplanned spend. |
| Above your upper threshold | Controller or CFO | Reserved for the largest amounts, so senior approvers see only what matters. |
| New or changed vendor details | Finance, independently of the requester | A common route for fraud. Always verify separately. |
Illustrative only. The right thresholds depend on your invoice volume, typical invoice size and internal control policy.
Manual vs. electronic invoice approval
Moving approvals from paper and email into electronic invoice approval software changes how fast invoices move, and how much you can trust the record afterwards.
| Manual (paper & email) | Electronic, with Leveled | |
|---|---|---|
| Getting to the approver | AP forwards the invoice and hopes it reaches the right person. | Routed to the right approver automatically. |
| Context | The approver sees the invoice alone and has to go looking for the PO. | Invoice, PO, receipt and any discrepancy arrive together. |
| Making the decision | Sign, scan and send back, or reply to an email thread. | Approve, hold or ask in one reply, inside the invoice's thread. |
| Partial approvals | Awkward. Usually means re-issuing or manual adjustments. | Approve the matched lines and hold the rest in the same reply. |
| Chasing | AP follows up by hand, invoice by invoice. | Outstanding decisions stay visible in the thread. |
| Audit trail | Scattered across inboxes and signed PDFs. | Every approval attributed and timestamped in the thread. |
Approve invoices in a single reply
Leveled turns invoice approval into a conversation. It does the checking, lays out what it found, and proposes a decision. You just confirm or change it.
Everything the approver needs, in one message.
Before an invoice reaches you, Leveled has read it, matched it to the PO and goods receipt, and worked out what's different. You see the answer, not the homework.
- ✓ Matching result summarised in plain language
- ✓ Discrepancies explained line by line
- ✓ A proposed decision to confirm or change
Say what you want done.
Reply "approve the matched lines and hold the rest" and Leveled does exactly that. Ask "what didn't match?" and it answers before you decide.
- ✓ Approve, hold, partially approve, or ask
- ✓ All inside the invoice's thread
- ✓ Preparer can never be the approver
How to choose invoice approval workflow software
Approval is where AP slows down, so the software you choose should be judged on one thing above all: how easy it makes the decision for the approver.
If approvers have to open three systems to check one invoice, they'll put it off. Look for approval that takes a single step, with nothing to look up elsewhere.
An invoice on its own isn't enough to approve. The PO, the receipt and the matching result should come with it.
Short deliveries are common. Approving the matched amount and holding the rest shouldn't need a credit note and a re-issue.
Check that the system actively prevents the preparer from approving, not just that it can report on it afterwards.
Every approval should be attributed and timestamped as it happens, with no separate step to record it.
The best invoice approval automation doesn't just route the invoice. It checks it first and proposes what to do.
Faster approvals, without loosening control.
Making approvals easier shouldn't make them weaker. In Leveled every approval is a message, attributed to a named person, timestamped, and kept as part of the permanent record.
Frequently asked questions
What is invoice approval?
Invoice approval is the step in accounts payable where an authorized person confirms that a supplier invoice is valid and should be paid. It sits between invoice processing (capturing and checking the invoice) and payment.
What is the accounts payable invoice approval process?
In most companies the AP invoice approval process runs like this: the invoice is received and captured, matched to the purchase order and goods receipt, routed to the right approver based on rules such as amount or department, approved, held or rejected, and then scheduled for payment, with each decision recorded for audit.
What is an invoice approval workflow?
An invoice approval workflow is the set of rules that decides who needs to approve an invoice, in what order, and what happens if they don’t respond. Common rules route by amount, department or cost center, vendor, and whether the invoice is backed by a purchase order.
What does invoice approval software do?
Invoice approval software sends each invoice to the right approver with the context they need, lets them approve, hold or query it, enforces controls like segregation of duties, and keeps a record of every decision. Leveled does this as a conversation: each invoice has its own thread where approvers review it, ask questions and decide.
How do AI tools help with invoice approval automation?
AI takes over the preparation that slows approvals down. Leveled reads and matches the invoice before it reaches the approver, summarises what matched and what didn’t, and proposes a decision, such as approving the matched lines and holding the rest. The approver only has to confirm or adjust it.
Can I approve part of an invoice?
Yes. If some lines match and one doesn’t (for example, a short delivery), you can approve the matched amount and hold the remainder in a single reply. Leveled records both decisions and keeps the held amount open until it’s resolved.
How does invoice approval software enforce segregation of duties?
Segregation of duties means the person who prepares or enters an invoice can’t also approve it. Leveled enforces this in the thread: the preparer can never be the approver, and every approval is attributed to a named person.
Where do approvers approve invoices in Leveled?
Inside Leveled. Approvers sign in and open the invoice’s conversation, where the invoice, PO, receipt and any discrepancy are laid out together. From there they can approve, reject, hold, partially approve or ask a question without leaving the thread.