Procuration chart: what is it and how do you set it up? Read our 4-step plan and our 9 tips!
Set up once, use again and again
In a procuration schedule, you define who should approve the entry when and under what conditions. For example, do you want approvers to look at the amount, general ledger account or cost center? You can easily include these types of conditions in an authorisation schedule. Depending on the entry, you determine who should approve an invoice. In theory, you only need one type of procuration scheme for all purchase invoices. Because after a one-time setup, the system evaluates all invoices according to the same logic. As an administrative employee, you no longer have to think about the individual process steps!
Step 1: Designate approvers
Which individuals in your organization should face an invoice? When should they receive it? What action(s) should they take? Do you work with limit amounts? Are there any budget holders? During step 1, you will draw out the approval process in detail. Fully map out how you want it to go!
Step 2: Determine your most important value
Which value is most crucial to you? Whether this is a cost center or general ledger, you need to determine this well in advance. When you have just started using an ERP system, it can be difficult to do this. In such a case, call in a consultant. He or she can guide you in making good initial choices, after which the process is automatic.
Step 3: Set up your procuration schedule (in the right order)
Is approval required or optional? If an invoice does not meet any conditions, who does it end up with? In a procuration chart, you capture all scenarios. That way you set it up completely and in the right order.
Step 4: Go live!
The fourth step is short and sweet: go live with your procuration schedule and benefit from an efficient, fast and smooth approval process!
Setting up a procuration schedule: 9 practical tips
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Set threshold amounts
When setting up a procuration schedule, you may choose to work with budget holders. In doing so, you specify who is authorized to approve up to what amount. For example, person A is authorized to approve invoices up to 500 euros, person B (person A’s manager) may approve invoices up to 1,000 euros, and person C is offered invoices over 1,000 euros. This system promotes speed because it allows smaller invoices to go through the approval process faster. Do keep in mind the amounts you typically deal with. For example, if you receive mostly invoices of 10,000 euros or more, it is not advisable to work with increments of 500 euros.
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Consider approval in list form
Does the director want to view every invoice separately – even one that has an amount of a few euros on it? It is often convenient to present invoices in list form, so that small invoices can be seen at a glance. Some workflow solutions offer this option. Invoices that have low amounts on them can thus be quickly approved.
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Set substitutes
What happens if an approver goes on vacation or is sick? Consider in advance who may set up replacements. Is it just the approver himself or someone from finance as well? Often the latter option is convenient, because a sick colleague probably can’t log into the system to set up a replacement.
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Make sure every invoice gets to someone
Sometimes an invoice does not meet any requirements. Think out what to do with the document in that scenario, so it doesn’t start floating around in a vacuum until the supplier calls to ask where payment is (this happens more often than you think!). Every invoice must reach someone within your organization!
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Establish well thought out scenarios (and test them!)
What is most important to you: administration, amount, general ledger, cost center or a combination of these? It is wise to determine this before setting up the procuration schema. In addition, it is essential to properly test all possible scenarios before the procuration schema goes live. Because once it is in place, making adjustments takes much more time and effort. After all, invoices are already in the workflow by that point!
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Determine how to handle collective invoices
Do you regularly process collective invoices? Then keep in mind that it takes longer to get approval on them. Several people have to take a look at the invoice, which sometimes seriously slows down the process. Consider carefully if you want to continue working with such invoices. Perhaps you could switch to one invoice per order or project number, for example. This often increases the processing speed.
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Set the right notifications
How do approvers know they need to take an action on the procuration schedule? For example, do they get an email or see a pop-up? Decide what notifications you want to set up and in what frequency people should receive them. That way people know when it’s time to take action. And only then will your well-designed procuration schedule have results!
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Provide clear instructions
When you are in the process of setting up your procuration schedule, you may be so focused on that that you don’t think about the final process. But the important thing is to get that right. Make sure, for this purpose, that employees receive clear instructions at the outset regarding the tasks they will perform in the process.
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Consider automatic approval
Depending on your software package, you can set certain invoices to be automatically approved. Think of invoices for cleaning, telephony and lease costs, but also gas, water and light. You will often receive these monthly and the amounts are basically the same. Perhaps you only want to view such invoices once a year and then only need to look at them if there are discrepancies. In that case, you can build automatic approval into your procuration scheme.
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