Checklist for Streamlining Invoice Approvals
Efficient invoice approvals aren't just administrative — they directly impact your cash flow, compliance, and business stability. For small and medium-sized businesses (SMBs) in the UAE, delays in approvals can disrupt payment cycles, strain working capital, and increase audit and compliance risk under VAT requirements and the UAE’s evolving e-invoicing program.
Key Takeaways
- Faster Approvals = Better Cash Flow: Delayed approvals slow down payments, increasing Days Sales Outstanding (DSO) and cash flow risks.
- Compliance is Critical: UAE businesses must meet VAT requirements, including TRN handling, proper VAT rates, and accurate documentation.
- Manual Processes Cause Issues: Paper or email-based workflows lead to errors, missed deadlines, and rejected invoices.
- Digital Tools Help: Using your ERP and/or an AP workflow tool can speed up approvals, improve audit trails, and reduce errors. On the AR side, tools like Kema can help accelerate customer invoice collection through reminders, payment options, and financing (where eligible).
Quick Steps to Improve
- Map Your Workflow: Identify bottlenecks and standardize processes.
- Set Clear Rules: Define approval thresholds, timelines, and responsibilities.
- Digitize & Automate: Use your ERP/AP workflow tool to route approvals, apply controls, and track progress.
- Monitor & Report: Track metrics like approval times and SLA compliance to find and fix inefficiencies.
- Stay Compliant: Ensure invoices meet UAE VAT requirements and store records digitally for audits.
By following these steps, UAE SMBs can reduce approval times, improve cash flow, and stay audit-ready under evolving regulations.
Step 1: Map and Standardize Your Approval Workflow
To streamline your invoice approval process, the first step is to map out how things currently work. Many small and medium-sized businesses (SMBs) in the UAE rely on informal or scattered practices, which can lead to delays and inefficiencies. By mapping your workflow, you can pinpoint where invoices get stuck, identify decision-makers, and eliminate unnecessary steps. Once you have this clarity, you can create a standardized process that ensures every invoice follows the same path — no matter which department submits it or who is available in the office.
Document Your Current Workflow
Start by documenting every aspect of your current approval process. Identify all the entry points for invoices, whether they arrive via email, supplier portals, scanned PDFs, or even paper copies. Then, trace the journey from data entry to payment release, detailing the roles, systems, and documents involved at each step. This includes tasks like validating purchase orders, matching invoices with goods receipt notes, coding to the correct ledger, routing for approvals, and archiving for compliance.
Be sure to include key trigger points — like value thresholds or mismatches — that prompt handoffs. For example, if an approver doesn’t respond within 48 hours, does the invoice escalate to their manager? Or, if an invoice amount exceeds the purchase order by more than 5%, who steps in to review it?
To uncover bottlenecks, analyze a sample of recent invoices. Use timestamps from your ERP or AP workflow system to calculate average cycle times. For instance, if high-value invoices take an average of seven days to clear or one approver consistently delays approvals by more than 48 hours, you’ve identified areas for improvement. (If you’re analyzing AR collections instead, you’d look at invoice sent/paid timestamps in your AR tooling where enabled.)
Create a visual map, such as a flowchart or swim lane diagram, to illustrate each step, the responsible roles, and the time spent. This visual tool helps non-finance stakeholders understand their responsibilities and builds support for process improvements. It also provides a baseline for measuring progress once changes are implemented.
Workflow Mapping Checklist
Standardize Core Processes
With your workflow map in hand, the next step is to establish a consistent process for handling all invoices. Standardization eliminates guesswork and reduces delays caused by inconsistent practices. It creates a clear sequence of steps, approval thresholds, and documentation requirements.
A practical framework for most invoices might look like this:
- Capture invoice data
- Validate supplier details and Tax Registration Number (TRN)
- Match the invoice to a purchase order or contract
- Verify VAT details
- Route for approval based on value and type
- Post to the ERP system
- Archive for Federal Tax Authority compliance
This structure ensures critical checks — like confirming VAT registration and matching invoice amounts with purchase orders — are completed before approvals, reducing errors.
Approval Thresholds
Define clear monetary thresholds for approvals, such as:
- Up to AED 10,000: Department manager sign-off only
- AED 10,000 to AED 50,000: Department head and finance manager
- Above AED 50,000: Finance manager plus CFO
- Above AED 250,000: Requires additional approval from the CEO or board
Document these thresholds in your finance policy manual and configure them in your ERP or workflow tool. Automating these rules ensures smaller invoices don’t unnecessarily occupy senior managers’ time, while larger expenditures receive proper oversight.
Matching Rules
Decide when to use 2-way or 3-way matching. For inventory or asset purchases, 3-way matching (invoice, purchase order, and goods receipt) is essential. For services — like consulting or software subscriptions — 2-way matching (invoice and purchase order) is usually enough, provided service completion is documented. Standardizing these rules reduces confusion and ensures consistent controls.
Auto-Approvals for Low-Risk Invoices
For predictable, low-risk invoices, consider auto-approval rules. For example, recurring expenses like utilities or telecom bills under AED 5,000 per month can be auto-approved if they meet specific criteria:
- Vendor is pre-approved and listed in the master supplier database
- Invoice amount falls within a 5% variance of the usual amount
- VAT is calculated correctly
- Invoice passes automated checks, such as TRN validation and matching rules
To maintain oversight, schedule periodic reviews of auto-approved invoices, set alerts for unusual patterns, and block auto-approvals if VAT or contract details deviate from expectations.
Note: Auto-approvals should be configured in your ERP/AP workflow tool, not assumed to be a feature of every finance platform.
Standardize Templates and Data
Ensure all invoice templates comply with UAE VAT requirements. Mandatory fields should include:
- Supplier and buyer legal names, addresses, and TRNs
- Unique invoice number
- Issue date (dd/mm/yyyy format)
- Description of goods or services
- Quantity, unit price, VAT rate, and amount per line
- Totals (excluding VAT, VAT amount, and including VAT) in AED
Align templates with UAE PINT AE data groups to simplify future e-invoicing integration. Avoid hardcoding a specific number of “mandatory data fields” unless you are referencing the latest official MoF data dictionary/spec. Clean up supplier and customer master data to include validated TRNs, correct VAT treatments, and AED as the default currency. This reduces delays caused by incomplete or inconsistent information.
Exception Handling
Clearly define rules for handling exceptions. For example:
- Invoices without a purchase order must include a written justification and require approval from both the department head and finance manager.
- VAT discrepancies or unusual cases (e.g., zero-rated or reverse-charged supplies) should be escalated to a tax specialist for review.
Step 2: Define Roles, Rules, and SLAs
After mapping and standardizing your approval workflow, the next step is to clearly outline who is responsible for each part of the process, the rules governing approvals, and the timelines for completing tasks. This step ensures accountability, reduces delays, and keeps things moving efficiently.
Assign Roles and Responsibilities
Start by identifying the key roles involved in your invoice approval process. For UAE SMBs, this typically includes the invoice creator or preparer, verifier or reviewer, approver(s), and finance controller or accountant. In smaller teams, one person might handle multiple roles, but it’s crucial to assign clear ownership for every step. Also, have a backup plan in place to avoid disruptions during public holidays, annual leave, or unexpected absences.
To formalize this, use a RACI matrix. This tool maps activities (e.g., invoice creation, VAT validation, budget review, approval, payment release) to roles, clarifying who is Responsible, Accountable, Consulted, and Informed. For example:
- The accounts payable clerk is Responsible for data entry.
- The finance manager is Accountable for final approval.
- The procurement team is Consulted for contract-related queries.
- The department head is Informed when payment is scheduled.
Share this document through email, your internal knowledge base, and onboarding sessions for finance and procurement staff. Review it annually or whenever major changes occur, such as adopting e-invoicing or integrating a new ERP system.
Set Approval Rules and Escalations
Once roles are defined, establish clear approval rules based on factors like invoice value, supplier type, and urgency. These rules help balance control with efficiency, ensuring low-risk invoices move quickly while high-value or high-risk invoices get the necessary scrutiny.
Value-based thresholds are a common starting point.
Set these thresholds in your ERP or workflow tool to automate routing. Beyond value, consider supplier and risk criteria. For trusted suppliers providing recurring services (e.g., rent, utilities), simplified rules like auto-approval up to a monthly cap can work well. For newer or higher-risk suppliers, especially those outside the GCC or with advance payment terms, require dual sign-offs from procurement and finance teams. This helps prevent fraud, ensures contract compliance, and confirms the supplier’s TRN is valid.
Urgency is another critical factor. Mark time-sensitive invoices — such as those tied to operational deadlines, government penalties, or early-payment discounts — with an "urgent" flag. Apply shorter SLAs and priority notifications while maintaining necessary controls, like dual approvals for high-value transactions.
To address potential delays, set up escalation processes. Define what constitutes "overdue" at each step based on your SLAs. For instance:
- Preparers: Task overdue after one working day.
- Department approvals: Overdue after two working days.
- Finance sign-offs: Overdue after three working days.
Send automatic reminders one day before deadlines. If no action is taken, escalate to the approver’s line manager or, for high-value invoices, to finance leadership. For invoices exceeding AED 50,000 that remain delayed beyond two working days, escalate approvals to finance management, highlighting risks like missed early-payment discounts or VAT reporting deadlines. Regular monthly reports can pinpoint recurring bottlenecks, allowing you to adjust staffing or approval limits as needed.
Establish SLAs and Controls
With a standardized workflow in place, enforce SLAs to link each role’s responsibilities to specific timelines. SLAs ensure timely approvals, prevent late payments, and support compliance with VAT filing deadlines. Align SLAs with payment terms — commonly 30 days from the invoice date in the UAE — and allocate time for each step.
For example:
- Invoice entry: Within one day.
- Verification: 1–2 days.
- Departmental approval: 2 days.
- Finance review: 2–3 days.
- Payment scheduling: 3–5 days before the due date.
Track SLA adherence through system timestamps, monitoring metrics like the average approval time by department, the percentage of invoices approved within SLA, and the number of escalations. If SLAs consistently prove unrealistic, adjust them accordingly.
To meet UAE VAT and e-invoicing requirements, ensure your system logs who created, modified, and approved each invoice, with precise date and time stamps. Document any changes to VAT rates, tax amounts, or TRN fields as required by the FTA. Store supporting documents — such as purchase orders, contracts, and delivery notes — linked to each invoice for easy retrieval during audits. Maintain a version history to show corrections, including adjustments for credit notes.
Introduce role-based access controls to safeguard sensitive data. For instance, only the finance manager and CFO should be authorized to edit tax-sensitive fields or approve high-value invoices. This ensures that all changes are properly tracked and approved.
Using an integrated AP stack (your ERP/AP workflow tool) can streamline routing, permissions, and audit trails. If you’re also managing AR, Kema can support customer collections (payment options, reminders, and financing where eligible) — adjacent to AP, but not a replacement for AP approval workflows.
Step 3: Digitize and Automate the Workflow
Now that your roles, rules, and SLAs are in place, it’s time to leave behind paper-based or semi-manual processes and embrace digital tools. These tools can enforce your invoice approval workflow, speeding up approvals, reducing errors, and supporting VAT record-keeping in the UAE.
Digitize Inputs and Documentation
The first step is to capture invoices and related documents digitally, which eliminates manual data entry and minimizes errors. Suppliers should send invoices to a single dedicated email address or upload them through a supplier portal that integrates directly with your ERP system. This centralized approach ensures invoices don’t get lost in individual inboxes.
Make sure all digital invoices comply with UAE VAT requirements. They must include key fields such as supplier and recipient details, TRN, a unique invoice number, the date in DD/MM/YYYY format, and amounts in AED. If you’re using an ERP like Odoo, QuickBooks, Zoho, Microsoft Dynamics, or Workday, configure it to populate these mandatory fields when generating invoices. (ERP capabilities vary — confirm what your specific system enforces.)
Digitize all supporting documents — purchase orders, delivery notes, contracts, and approval emails — and store them in a centralized, searchable repository, such as a cloud document management system. Use clear naming conventions (e.g., PO-2025-001, INV-2025-001) and metadata tags (e.g., date, supplier, amount, status) to retrieve documents quickly during reviews or audits. Linking invoices to their corresponding purchase orders and delivery notes allows for automated three-way matching, ensuring accuracy before approval.
Automate Approval Rules and Notifications
With invoices digitized, let automation take over the routing and notification process. Manual invoice processing is often significantly slower than automated workflows.
Configure your ERP or AP system to automatically route invoices based on criteria such as amount, department, project, or supplier type. For instance, invoices under AED 5,000 that match a valid purchase order can be auto-approved. For higher amounts, set up an approval matrix: invoices over AED 5,000 may require department-level approval, while those exceeding AED 25,000 might trigger a review by senior finance leadership. High-risk invoices should undergo additional checks, like TRN validation and VAT accuracy reviews.
Automated notifications play a key role in keeping the process on track. As soon as an invoice is submitted, the system should notify the first approver via email or in-app alerts, providing key details such as invoice number, supplier name, AED amount, due date, and a link to view the invoice and its supporting documents. If the approver doesn’t respond within the SLA, the system should send reminders and escalate the approval if necessary.
To support VAT record-keeping, your system should enforce required invoice fields. Any invoice with missing TRNs, incorrect VAT rates, or mismatched purchase order details should be flagged and held for correction.
Enable Real-Time Visibility
Automation not only streamlines the approval process but also provides real-time data for better oversight. Traditional methods relying on spreadsheets or email threads are prone to delays and inaccuracies. A centralized dashboard — available within your ERP or through your finance stack — offers instant updates on invoice status (pending, approved, or paid), amounts, due dates, and approvers.
For UAE SMBs, real-time visibility is essential for managing cash flow in AED and meeting VAT filing timelines. Dashboards should highlight metrics like the number and value of invoices awaiting approval, average approval times by department, upcoming due dates, and DSO.
Kema’s AR dashboard can provide visibility into receivables status and collections performance, helping teams prioritize follow-ups and understand what’s outstanding.
Additionally, Kema’s invoice financing feature allows businesses to access 80%–100% upfront (minus fees), subject to eligibility and invoice approval, with funds typically disbursed in 1–2 business days after invoice approval. Avoid publishing fixed DSO reduction claims (e.g., “5–15 days”) unless you have verified data.
Beyond individual invoices, use your dashboard to monitor compliance and audit readiness. Ensure each invoice has a complete audit trail, recording who created and approved it, along with timestamps. Storing all linked documents ensures that during an FTA audit, you can retrieve any invoice and its supporting documentation quickly.
Step 4: Strengthen Compliance and Reporting
After setting up your automated invoice workflow, the next step is ensuring that every approved invoice complies with UAE requirements and provides your finance team with the transparency they need to monitor performance.
Ensure Compliance with UAE VAT Regulations
All approved invoices must fully comply with UAE VAT requirements, as any missing information could lead to FTA audit scrutiny or delays in VAT recovery for customers.
To ensure compliance, configure your ERP system — whether it’s Odoo, Microsoft Dynamics, Zoho, QuickBooks, or Workday — to make these fields mandatory during invoice creation. Use drop-down menus for VAT categories (standard 5%, zero-rated, exempt, or out-of-scope) to minimize errors. Before an invoice is approved, your system should verify that the supplier's TRN is correctly entered, VAT amounts match line totals, and relevant dates are included. For cross-border transactions, ensure the invoice specifies the VAT treatment and keep supporting documentation.
Introduce segregation of duties and three-way matching (PO, receipt note, invoice) to prevent fraud and maintain consistency. High-risk scenarios, such as zero-rated supplies or invoices over AED 50,000, should be flagged for secondary review. For non-PO invoices like utility bills or professional fees, create an exception-handling process that requires additional approvals from the finance team.
As the UAE rolls out structured e-invoicing under the OpenPeppol / PINT AE framework, your workflow should be ready for structured fields and machine-readable formats as required for your phase. Where applicable, you may need to work with an Accredited Service Provider (ASP) as the program phases in. Don’t assume “real-time FTA validation” steps inside your internal approval flow unless your ASP/ERP implementation explicitly supports that.
Digitally store all approved invoices and related documents for at least five years, indexed by TRN, customer name, invoice number, date range, and VAT period. Maintain audit logs with timestamps and role-based access.
Monitor and Report Key Metrics
Compliance is one part of the puzzle — tracking performance metrics is equally important to optimize your workflow. Automated systems can reduce processing time and costs materially, especially when paired with clear approval rules and real-time tracking.
Key metrics to monitor include:
- Average approval time
- First-pass approval rate
- Number of invoices returned for corrections
- Percentage of invoices approved within SLA
- Number and value of invoices returned for VAT/TRN issues
- Approval delays by business unit, segment, or approver
- Volume/value of invoices by risk category (e.g., high-value or cross-border)
Real-time dashboards help visualize these metrics and highlight exceptions. For UAE SMBs, linking approval times to DSO and cash flow forecasts is particularly useful. Delays in AP approvals can impact your own invoice issuance and collections, so monitoring both AP and AR metrics together gives a clearer view of working capital.
Use these metrics to drive ongoing improvements. Schedule regular reviews (monthly or quarterly) to discuss KPIs, trends, and action plans. Treat your approval workflow as a dynamic system — one that evolves through measurement, analysis, and refinement — to maintain compliance, cut costs, and improve cash flow.
Step 5: Continuously Improve the Approval Workflow
Automating your invoice approval process is not a one-and-done task. It’s an ongoing effort that requires regular tweaks to keep up with business growth, regulatory updates, and operational needs.
Review and Update Processes Regularly
Review your approval workflow at least once a year — or sooner if there are changes like VAT guidance updates, organizational restructuring, or shifts in invoice volume. If invoice volume increases, adjust approval thresholds: low-value invoices should move quickly, while high-value ones may still require multi-level approvals.
Keep your approver matrix up to date whenever organizational changes occur. Outdated routing rules cause delays (e.g., invoices routed to the wrong person or left unattended). Ensure your ERP/AP workflow tool reflects the latest authority limits.
Review exception paths regularly. For example, if exceptions are frequently due to missing TRNs or incorrect VAT classifications, implement validation rules that require these fields before submission.
Stay aligned with UAE VAT and the phased e-invoicing rollout. Ensure your invoice data can support the required structured fields when your phase becomes mandatory.
Gather Feedback and Provide Training
Gather feedback through quarterly surveys or workshops. Use simple scales to measure approval speed, clarity, and system usability. Follow up with role-specific training:
- Invoice owners: completing mandatory fields correctly
- Approvers: understanding VAT treatments and approval delegation
- Admins: configuring routing, access controls, and exception rules
Provide refresher sessions soon after any workflow updates. Clear English guidance and visual process maps help in multicultural teams.
Use Data Analytics for Improvement
Track metrics like approval duration, rejection reasons, delayed approvers, and patterns by supplier/category/amount. Use dashboards to monitor:
- Approval time per invoice
- Approval time by approver/department
- SLA breaches
- Exception rates
- On-time payments
- Early-payment discount capture
Audit trails help identify bottlenecks. If one approver is consistently slow, redistribute workload, add backup approvers, or adjust authority limits. Segment by supplier/category to see where exceptions are clustering.
If you’re also using Kema on AR, its receivables insights can help you prioritize collections and manage cash flow — complementary to AP controls.
Conclusion
Optimizing your invoice approval process is about building a financial workflow that grows with your business. For UAE SMBs, transitioning from manual, paper-based methods to a structured, partially automated system offers clear advantages: quicker approvals, reduced processing effort, better cash flow oversight, and enhanced VAT record-keeping.
A well-defined, standardized workflow that tracks every step — from receipt to approval — removes ambiguity and improves control. Start by defining roles, rules, and SLAs so everyone knows who approves what, by when, and what happens when deadlines are missed.
Once your workflow is standardized, digitization becomes the next essential step. With the UAE’s phased Electronic Invoicing System based on OpenPeppol / PINT AE, businesses should prepare now so their invoicing data can be exchanged in the required structured format when their phase goes live — without overhauling processes at the last minute.
Compliance should be built into every step: required VAT fields, TRN hygiene, segregation of duties, consistent exception handling, and electronic storage in an indexed format.
Treat your invoice approval process as an ongoing effort. Track approval time, SLA trends, and exception reasons. Use the insights to simplify low-risk approvals, strengthen controls for higher risk, and train teams where errors repeat.
If you also want to improve collections (AR), platforms like Kema can help streamline customer invoice-to-cash — including payment collection, reminders, and financing options for eligible approved invoices — with ERP sync supported for systems such as Xero, QuickBooks, Odoo, Zoho, Dynamics, and Workday (availability depends on your setup).
FAQs
How does automating invoice approvals benefit cash flow and compliance for SMBs in the UAE?
Automating invoice approvals reduces internal delays, helps teams meet payment terms, and improves visibility into liabilities — all of which supports healthier cash flow planning. It also strengthens compliance by enforcing required invoice fields, creating an audit trail (who approved what and when), and standardizing exception handling for VAT-sensitive cases.
What information should an invoice include to comply with UAE VAT requirements?
To align with UAE VAT requirements, invoices should include (at minimum):
- Supplier name, address, and TRN
- Customer name and address (and TRN if applicable)
- “Tax Invoice” label (where required)
- Unique invoice number
- Issue date (DD/MM/YYYY)
- Description of goods/services
- Quantity and unit price (where relevant)
- VAT rate and VAT amount (line-level where applicable)
- Totals: net, VAT, and gross in AED
How can businesses in the UAE switch from manual to automated invoice processing without disrupting operations?
Start with a phased approach:
- Centralize intake (single AP inbox/portal)
- Standardize templates, fields, and exception rules
- Implement approval routing in your ERP/AP workflow tool
- Digitize and link supporting docs (PO/GRN/contracts)
- Roll out dashboards + weekly exception reviews
- Train approvers and invoice owners using short job aids
This keeps daily operations running while you gradually reduce exceptions and cycle time.
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