Vendor Invoice Auto Approval

Discovery offers the option to Auto-Approve Vendor Invoices if certain criteria are met. Vendor Invoice Auto-Approval is not active by default and each tenant must request the feature be activated. In addition, the Auto-Approval feature enables users to set two different thresholds to help identify outlier invoices: Invoice Total Amount Threshold & Invoice Total Variance Threshold (see below).

If enabled, Vendor Invoices will be auto-Approved under the following criteria:

• The invoice total amount is below the Invoice Total Amount Threshold (if set)
• The Invoice Total Amount Variance threshold is not exceeded (if set)
• There are no Line Item revisions for the Vendor Invoice.
• All Line Items are associated with either a Vendor Contract Fee, Vendor Service Fee or Vendor Service Charge.

Auto Approval Invoice Validation Guidelines

Overview

This document outlines the validation rules that determine whether an invoice qualifies for Auto Approval based on the administrator’s settings. By adhering to these guidelines, we aim to streamline the invoice approval process, enhance automation, and ultimately save time and money.

Validation Rules

1. Invoice Total Amount Threshold (optional)

• Definition: The maximum allowable vendor invoice amount to qualify for Auto Approval.
• Default Setting: $10,000 (set during onboarding).
• Example: If the threshold is set at $10,000, any invoice totaling $10,000.01 or above will not be auto approved.

2. Invoice Total Amount Variance Threshold (optional)

• Definition: The maximum allowable percentage change from the total invoice amount of the previous invoice for a specific account number
• Baseline Establishment: The first invoice processed for each account will not auto approve to establish a baseline.
• Example: If the variance threshold is set to 5% and the previous invoice total was $100, an invoice totaling $110 will not be auto approved (10% variance).

3. Line Item Validation Against Vendor Contract

• Requirement: All line item amounts must exactly match the rates/fees set in the vendor contract.
• Conditions:
  • If there is no matching rate/fee in the vendor contract, the invoice will not auto approve.
  • If the service level is designated as having No Vendor Contract, the invoice will auto approve.
  • If the service is designated as MISSING a vendor contract, it will not auto approve.

Upon successful Auto-Approval, the Vendor Invoice status node will display as completed. The description on that node will read "Invoice has been auto approved."

When a Vendor Invoice fails to Auto-Approve, an error message will be provided to indicate what needs attention.

Benefits of Auto Approval

• Increased Automation: Initial testing showed that 30% of invoices passed auto approval, with potential for increased efficiency over time as contracted rates and fee structures improve.
• Time and Cost Savings: Auto approval eliminates the need for manual clicks and processing for compliant invoices, allowing teams to focus on invoices that require attention, such as those needing credits from vendors.

If you have additional questions or need more in depth information, please feel free to send us a message using the help beacon in the lower right-hand corner.