From XU Magazine, 
Issue 20

How to: Build a software foundation for advisory with ApprovalMax & Receipt Bank

Integrating apps into an end-to-end Xero-based Bill Automation flow ensures forecast data quality and process efficiency…

This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
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Providing high-quality advisory services is the ambition of many accounting & bookkeeping practices. Advisory services use insights obtained from cash forecasts and recommend to clients’ business owners the proper course of action both short and long term, for example, focusing on the bottom line to reduce overall spending, boost sales revenue, or take out a business loan to cover a potential cash shortage.

However, what often stands in the way of delivering first-class advisory services is the lack of reliable, actionable and up-to-date data in the core accounting system as well as accounting processes that are not only complex and bespoke but also manual.

Invoice processing

One of such complex processes with a high impact on the accounting data quality is invoice (bill) processing. Basic invoice processing starts with the receipt of invoices, which are subsequently entered into the accounting system in the form of Bills. These will then be validated and eventually get paid.

If not done right, bill processing can suck up all the company’s resources and time, and even produce corrupt accounting data. Paper invoices might get lost, misplaced or allocated to the wrong account, tracking category, budget. Missing a payment due date might lead to supplier fines while incorrect invoices that should not have been accepted in the first place are paid. All this has its impact on the bottom line and often causes time-consuming internal investigations followed by manual process changes.

Bill automation

On the upside, with a high level of automation and efficient data validation, bill processing can indeed become a solid foundation for providing high-quality advisory services.

When done properly, accounting data will be appropriately validated and accurate, payments will be made on time and with confidence. The entire process will be transparent and traceable, allowing easy on-the-fly adjustments.

On the functional level, Bill Automation requires full digitisation of data with Xero as the system of records, complemented by fully digital workflows for Bill review and authorisation as well as data quality control.

This is accomplished by using two of Xero’s leading application partners: Receipt Bank, the #1 pre-accounting tool for accountants & bookkeepers as well as ApprovalMax, the best-in-class application for Bill review and approval.

How it works

Both ApprovalMax and Receipt Bank are natively integrated with Xero and designed for working together to provide a seamless end-to-end Bill Automation flow.

To start the process, all supplier invoices and corporate expense receipts go to Receipt Bank, which offers several options for submission: taking photos with a mobile device, emailing images or PDFs, and having suppliers send their invoices electronically or even as paper documents. Once the capture of relevant data is completed, Receipt Bank pushes invoices and expense receipts as Bills to Xero.

When a Bill in Xero is tagged with the 'Awaiting approval" status, it gets picked up automatically by ApprovalMax. The following step takes care of Bill review and ensures that all extra-added data such as account and tracking category is correct. That is also an opportunity to check if the proper supplier has been selected for this Bill, to avoid the unintended creation of multiple "ghost" suppliers, e.g. “Pepsi” vs. “Pepsi Co”.

Next, ApprovalMax executes a multi-level multi-step authorisation process based on the settings specified in the approval matrix. Approvers are selected based on predefined criteria and get notified using their preferred method of communication (mobile, web, and/or email).

Once a Bill has been fully authorised, it is marked in Xero as “Awaiting payment”. Throughout the whole process, the Bill status is completely transparent and visible. So even Bills that are not yet finally approved, can be properly accounted for in the cashflow forecast.

Why leave it there?

To find out more

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