If we automated the accounting, how do I have the opportunity to stop things I don’t agree with? How do I keep control over budgets?

The problem

Accounting automation from suppliers directly into your accounting platform can deliver you a whole realm of benefits, instant reporting and alerts - but how do you retain control overspend? For example, if a bill from a supplier comes in and is accounted for before you see it - but is not agreed by you, how do we stop it from being paid or reported on?

One of the barriers to cloud and automation adoption is the perceived loss of control that a business owner might have - especially when they want to personally sign everything off. Usually, this means that they sit at the from of the process, seeing all the post before the accounting platform does. This is a bottleneck for the business with so much information resting with such a usually busy person. They say that knowledge is power - and unless the knowledge is being shared in the process promptly, your business will never be as powerful as it could be.

How can we stop things that we don’t agree with? How does the boss still get to ‘approve’ things before they’re accounted for? We know many clients like this - and with different budget holders in different teams too - how do we get them all involved AND harness the power automation could bring us?

What we did

What we need here is a way of involving a decision-maker in the automated routines we have created. This is where another add-on for our accounting platform comes in - ApprovalMax.

Firstly, we need to be aware of the different states that the accounting platforms can hold bills. Xero uses ‘Draft’, ‘Awaiting Approval’ and ‘Awaiting Payment'. Only those that make it to ‘awaiting payment’ are reported on and form a part of our balances. Therefore these previous places are safe places for bills to be queued in until we are happy with them. The way Xero is designed allows things to go straight in as approved, but a small tweak in our workflow means we can make use of the rest.

ApprovalMax makes use of the status categories listed above. It watches the accounts for new items falling into this 'awaiting approval' category and sends a message to the relevant person that there’s something new for them to review. The user then gets to approve, query or reject the bill before it goes any further. If you want to add more complex approval rules, then you can do that too. Xero ignores anything not in the final stage (awaiting payment) - and so the business is protected from things being paid that are not yet approved.

To make things super-easy for the user, the app works via email, app or web page. Therefore it's left to a user preference on how they want to operate.

We work with a SaaS company that has a tall hierarchy staffing structure with many junior managers up to a CxO team and a chairman. Different managers have responsibilities over different budget areas. The CEO has the responsibility for anything over £1,000 and the Chairman has responsibility for anything above £10,000. We’ve set up ApprovalMax to allow all stakeholders to sign off where they need to.

ApprovalMax changes the status in Xero for you and moves approved bills to ‘awaiting payment’. Whilst it’s there, it also creates an audit trail to record who approved it and when.

What's life like for the client now?

Our client has been able to fully embrace automation across an international business. They use Finance Box for their bookkeeping and automation wherever possible to ensure consistency and speed of reporting. Budget holders are clear on their responsibilities and stakeholders have total confidence that budget holders have personally signed things off before they are reported on (and paid).

Approval limits allow the hierarchy of approvers to sign off what is relevant and ensure budgetary control. This gives the CFO confidence to allow payment runs that Finance Box propose on a weekly basis.

The audit trails are an additional tick in the box for their auditors.

Putting this process in place took less than a week including the training to staff members.

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