Digital Invoice Approval: How to Streamline the Approval Process Without Paper Chaos

Invoice approval is an essential step in the processing of incoming invoices. Only invoices that are correct in terms of form and content may be paid in order to rule out legal and accounting risks, avoid queries or discrepancies, and ensure smooth processing. Special care must therefore be taken with invoices to be paid with regard to the data, amounts, and, of course, deadlines specified. In many companies, invoice approval is still done analogously and on paper, which often leads to delays. While certain employees only check invoices initially, others are authorized to approve these invoices for payment. This results in additional time expenditure, which can be made more efficient, faster, and more flexible through digitization.

Digital invoice approval saves your company time and money and reduces manual work steps. The error rate is significantly reduced and invoices are paid faster. With just a few clicks, the relevant people can approve invoices anytime, anywhere.

Due to the e-invoicing requirement that has been in effect in Germany since January 1, 2025, the switch to digital approval processes makes particular sense. Since then, companies must be able to receive e-invoices. Electronic processing is therefore the next logical step. In Austria, too, e-invoicing will be mandatory sooner or later. Bring your company up to date now and benefit from time and cost savings.

What is Invoice Approval? Definition & Basics

Invoice approval is part of invoice management. Incoming payments are checked by the responsible person(s) and approved for payment. Without this step, invoices cannot be paid. The more people involved, the greater the effort and the likelihood of errors in the process.

In many companies, invoice approval still follows a paper-based, manual process. This not only results in high resource consumption, but also in a great deal of time expenditure that could be avoided with simple means.

These are the common methods of invoice approval:

Why is Invoice Approval Important?

Invoice approval is an essential control point for the correct processing and payment of invoices. It involves checking whether the invoice contains all the information required by law, whether the amounts are correct, and whether all deadlines have been met. Once this has been done, the invoice is approved, enabling payment to be made. Delayed or even missing invoice approval processes can have severe consequences for companies. These range from financial losses due to missed deadlines (loss of discounts, reminder fees) to legal problems (compliance violations).

Digital invoice approval greatly minimizes these risks. Especially since the e-invoicing requirement came into effect in Germany at the beginning of 2025, a digital invoice approval process makes sense. In Austria, too, it is only a matter of time before e-invoicing becomes mandatory in the B2B sector. E-invoicing is already mandatory for the federal government and public administration. Programs for sending and receiving e-invoices usually also enable digital approval.

When invoices are recorded, processed, and approved digitally, there is less risk of them being overlooked. The entire process is clearly documented and therefore traceable, and time and costs are significantly reduced. This is also referred to as electronic invoice workflow. The risk of errors is negligible, and invoices are automatically checked for compliance with all legal requirements.

How Can I Speed Up the Invoice Approval Process?

Time savings are a key advantage of digital invoice approval. Manual approval requires a lot of time from several employees. Invoice data is entered manually, checked by different people, and usually approved with physical signatures. Where exactly most time resources are wasted in the approval process varies from company to company. To speed up the approval process, it therefore makes sense to analyze the factors that typically cause delays in your company. This will help you determine how much you can save by switching to digital invoice approval.

Digital invoice approval using the appropriate software automates the approval steps. Invoices are automatically recorded, documented, stored, and assigned to the responsible persons. If the respective person is unavailable, substitute arrangements ensure that there are no delays even during illness or vacation.

The reminder function of digital software systems is particularly practical. Important factors here include deadlines such as discounts, payments, and reminders, as well as the availability of the responsible persons. This means that the time available for approval is precisely defined so that the entire process can be completed on time. If someone is too slow, the system sends that person a reminder.

To optimize your entire business processes, we recommend not only digitizing invoice approval, but also relying on electronic processing for invoice creation. Our comprehensive guide shows why and how you should switch to e-invoicing.

Digital Approval Process: How Electronic Invoice Approval Works

Digital invoice approval follows a step-by-step process from invoice receipt to payment. The basic system is as follows:

Digital Invoice Approval with free-com: How to Optimize Your Process

We help you digitize your entire invoice approval process. Our tool is particularly practical to use and responds intuitively to your business requirements.

All incoming invoices are processed digitally and flexibly, taking into account important compliance requirements and legal regulations. Our software handles the entire electronic invoice workflow, from invoice receipt to archiving. This means less effort and more control for you.

This is what the free-com electronic workflow for incoming invoices looks like:

Conclusion: Why Digital Invoice Approval is Worthwhile

There are many reasons why switching to digital invoice approval is worthwhile. The digitization of invoice processing is the logical next step, given that e-invoicing is already mandatory in Germany and is likely to become so in Austria in the near future. This step brings with it a number of advantages. It leads to a significant reduction in costs in the invoice processing process. Digital processing of incoming invoices saves your company time and resources. The invoice approval process is more flexible, faster, and less prone to errors.

Electronic data capture and individual processing steps ensure that the invoicing process is clearly documented. Deadlines and legal requirements are met, and invoices can be found and viewed at any time. The digitization of invoice processing thus results in an enormous increase in efficiency for your accounting department.

Would you like more information about digital invoice approval? Or do you have questions about how our software works specifically for your company? Feel free to contact us.