Do invoices get stuck bouncing between departments seeking approvals? 

Does your team struggle to match purchase orders to validate supplier charges? 

Invoice bottlenecks slow down payments and drain productivity. Fortunately, automating validation workflows accelerates approvals for both PO and non-PO invoices.

This guide explains the key differences between purchase order (PO) and non-PO invoices and how leading finance teams use intelligent automation to smooth invoice processing across both categories. 

Read on to learn how invoice automation eliminates manual effort while adding controls that reduce maverick spending.

What is the Difference Between PO and Non-PO Invoices? 

Here is a detailed explanation of the differences between PO and non-PO invoices:

Purchase Order (PO) Invoices:

1. Are directly tied to a Purchase Order that was issued beforehand to the supplier 
2. The Purchase Order contains details of the agreed upon goods/services to be provided, quantities, pricing etc.
3. When the supplier delivers the goods/services, they include the relevant Purchase Order number on their invoice
4. This allows the Accounts Payable team to match the invoice seamlessly to the Purchase Order to validate accuracy of what was ordered, pricing, quantities before releasing payment
5. Having a PO to match against streamlines the approval process since the purchasing parameters are pre-defined

Non-Purchase Order Invoices: 

1. Are NOT tied to a Purchase Order
2. Usually represent one-off types of purchases, expenses or reimbursements versus systematic procurement
3. Common examples include:

     – Employees submitting expenses incurred on corporate travel

    – One-time maintenance/repair services 

    – Reimbursements for miscellaneous fees or stipends

1. These invoices have no Purchase Order to validate against
2. Therefore, they need to go through an elaborate approval chain based on the expense category and costs

     – For example, employee expenses may need manager + finance approval

1. High-value services may need C-level sign-off

– Approvers manually verify the validity and accuracy of expenses before releasing payment

– This makes the approval process lengthier since they lack an associated PO for validation

In summary – PO Invoices have pre-validated ordering documents which streamlines payment. Non-PO Invoices undergo complex manual approval chains to establish validity before release.

Challenges With Manual Invoice Processing

Manually validating PO and non-PO invoices creates bottlenecks that delay payments. Common pain points include:

1. Time-Consuming Data Entry

AP staffers must manually key in volumes of data from paper or PDF invoices. This tedious rework duplicates information already in procurement systems and exposes teams to input errors.

2. Difficulty Tracking Invoice Status

As invoices circulate through email chains seeking approvals across remote finance stakeholders, it becomes nearly impossible to track status without constant follow-ups.

3. Matching PO Invoices

Validating supplier charges against POs demands intensive manual scrutiny that still leaves organizations vulnerable to overbilling errors.  

4. Complex Non-PO Approval Chains

Lacking defined workflows, non-PO invoices bottleneck around decision makers as AP struggles to correctly route invoices based on expense categories and cost thresholds.

Automating Invoice Workflows for Faster Approvals 

Modern software Solutions use optical character recognition (OCR), intelligent workflows, and rules-based validations to streamline processing of all invoices. Key capabilities include:

PO Invoice Automation

Optical character recognition (OCR) and AI software can instantly scan paper or digital invoices and extract all key information (supplier name, PO number, invoice number, line item data like quantities and pricing etc.) without any manual data entry needed.

This extracted data then auto-populates the requisite fields in the software. The system then runs auto-validation rules to compare invoice line item charges against the original purchase order to match quantities and pricing.

Any discrepancies are flagged as exceptions for review. But validated invoices automatically route directly into integrated accounting/ERP systems like SAP, Oracle etc. to update payables ledgers and release payments. No duplicate data entry is needed to post the validated invoices.

Non-PO Invoice Automation

For employee expense reports, utility bills and other non-purchase order invoices, automation software enables organizations to establish pre-configured approval rules and complex workflow chains based on:

• Expense types (travel, supplies etc.)
• Cost thresholds
• Approver hierarchy

As non-PO invoices enter the system, OCR extracts key details, then custom workflow rules identify the correct approval chain based on the expense data. Invoices automatically route to the right approvers like Department Heads, Finance Managers etc. as needed by the organization policy.

Approvers have dashboards to efficiently manage invoices awaiting their authorization. Once approved as per rules, the invoices once again sync directly into backend accounting systems.

This end-to-end automation minimizes manual handling and accelerates approvals for all categories of invoices. Approved invoices turn into payments faster.

How IQInvoice Accelerates Invoice Processing?

Here is how IQInvoice helps accelerate invoice processing and bringing in efficiency in accounts payable: 

1. AI and OCR Digitization

At the core of IQInvoice’s platform is advanced AI based optical character recognition (OCR) technology that can instantly scan paper or digital invoices and extract over 90% of the key data without any human data entry.

This data includes supplier name, invoice number, line item descriptions, quantities, unit costs etc. Accurate OCR extraction avoids manual errors and accelerate processing.

1. Invoice Validation

For purchase order invoices, IQInvoice has automated 3-way matching capabilities. It validates supplier charges against original purchase order info including contracted prices, agreed payment terms etc.

Any mismatches are flagged for easy exception review. But matched invoices skip straight to ledger updating and payment without agent review.

1. Workflow Rules

IQInvoice enables configurable rules that mimic organization approval hierarchies and policies to route non-PO invoices to appropriate decision-makers.

For instance, expense reports get routed to department heads first for travel budget confirmation. Invoices exceeding 100,000 go straight to CFO approval. Pre-configured rules route invoices perfectly every time.

1. Analytics Dashboards

Embedded analytics offer real-time insights into invoices awaiting action, aging reports, dispute/approval trends. This empowers managers to monitor backlogs and address bottlenecks proactively.

By combining intelligent OCR, validations, workflows, and reporting, IQInvoice drives touchless processing and accelerated approvals to optimize procure-to-pay speed and efficiency.

By automating validation and approval workflows, IQInvoice customers achieve:

– 60-80% faster invoice processing

– Over 50% lower invoice processing costs

– 2% average increase in early payment discounts

“IQInvoice has transformed the way we manage our expenses. With a significant reduction in our processing time from 5 days to just 1 day, we’ve seen a remarkable improvement in efficiency. The implementation of ICR/OCR, automated invoice processing, and workflow approvals matching our Delegation of Authority has been a game-changer. We’ve cut our processing costs by 70%, and IQInvoice has become an indispensable tool for us” :  Senior Manager, Finance, Consumer Electronic/Appliances company

Ready to simplify invoice processing? 

Schedule a Free demo with IQInvoice to see how leading organizations digitize and automate approvals for prompt supplier payments.