Best Invoice Approval Workflow Practices for Property Managers

When an invoice lands on your desk or in your inbox, it's never a quick, one-step approval. Invoice approval is a drawn-out process that stretches over days, sometimes even weeks or longer, especially in a busy property management firm. I remember reading a report by Stampli and Treasury Webinars, which showed that small companies take an average of 15 days to process invoices. Mid-sized firms take 17, and enterprise-level businesses around 20 days. 

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What's more concerning is the time wasted. AP professionals are spending about 20% of their workweek chasing approvals. That's an entire workday each week hunting down signatures from maintenance supervisors, regional managers, and accounting teams. That's time they could be spending on analysis, forecasting, and handling exceptions. And when too many people touch the process, or there's no clear separation of duties, the whole process becomes vulnerable to fraud. 

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I remember reading about an employee in Oregon who stole $4.5 million over 15 years by approving fake invoices to personal accounts. In property management, there's even more room for risk and delay. You're handling utility bills, contractor payments, maintenance repairs, insurance renewals, and all of that for dozens or hundreds of properties. 

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Remember, each property operates like its own mini-business with unique vendors, maintenance contracts, and utility providers, but you still have to roll everything up into consolidated financials that comply with regulations. That's why having a solid, streamlined invoice approval workflow is a must. In this guide, I'll walk you through what I've learned are the best invoice approval workflow practices for property managers.   

Best Invoice Approval Workflow Practices for Property Managers 

Invoice approval workflow covers everything from the moment a bill arrives until payment hits the vendor's account. It's the structured path each invoice follows to ensure accuracy, policy compliance, and proper authorization. The goal is simple: to reduce mistakes, maintain financial control, and pay vendors on time. But before I share what works, let me explain why so many workflows fail. 

Why Workflows Fail

Invoice processing involves mountains of paperwork, multiple approval layers and too many manual steps. For example, you have too many emails and too many people involved with no clear accountability, creating confusion. That's how you end up with a frustrated AP team and vendors calling you every other day about payment delays. Here are common reasons why the workflow usually fails. 

Lack of Standardization

In property management, invoices show up in all formats, such as PDFs, Excel sheets, scanned receipts, and the occasional handwritten receipts. Working with dozens of vendors means each one sends bills their own way. Each format uses different layouts, terminology, and field locations. One vendor includes a PO number in the subject line, another puts it halfway down the page. This lack of consistency makes it hard to process invoices quickly and accurately. 

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Your AP team will spend more time figuring out what's missing, like invoice numbers, tax amounts, or purchase order references, than actually entering the data. Non-standard layouts make even automation hard, as invoice-scanning software struggles to pull consistent data from inconsistent formats.  

Matching Errors

Normally, the invoice should match the PO and receipt. But discrepancies happen. Each mismatch triggers a manual investigation. You'll be calling vendors, checking with site managers, and digging through email trails. Meanwhile, the invoice will be sitting in limbo, and you will end up with late payments, which means you'll miss early payment discounts. 

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Duplicate payments are another nightmare. Contractors sometimes submit the same invoice multiple times through different channels, such as email, portal, and paper copy. Or the vendor may resubmit the invoice due to delayed payments. Without proper controls, you'll accidentally pay the same bill twice.

Lack of Transparency 

Ask yourself this question: if a vendor calls you right now asking about a specific invoice, how long would it take you to give a straight answer? For a lot of property management firms, the answer is Let me get back to you. And that's a problem. When there's no visibility into where an invoice is in the workflow, the AP team ends up in firefighting mode - searching through emails, spreadsheets, and notes just to track status. 

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You'll even find that the accounting team doesn't know which approvals are pending or why invoices are delayed. Meanwhile, vendors grow impatient and make repeated follow-up calls because they can't track their payment status. These calls eat up your team's time and strain relationships with service providers.

High Processing Costs

Manual invoice processing involves printing, scanning, filing, physical storage, and chasing approvals. FreshBooks estimates that the average cost of processing a single invoice is around $15. However, in more complex setups, like in property management, where every invoice might need to be reviewed by property managers, regional heads, and accounting, that number climbs to around $40. And if a mistake slips through, such as wrong amounts, duplicate payments, or missing approvals, correction costs can exceed $50 per invoice. That includes staff time, vendor calls, payment reversals, and system corrections.    

Mapping Your Current Process

Now, if your current workflow suffers from one of the above bottlenecks, it's time to fix it. But before you overhaul it, document exactly how invoices flow through your company. Note that it isn't about how it should work, but about your current reality.  Gather input from everyone involved, such as accounts payable clerks, property managers, maintenance supervisors, and regional directors. These front-line people know where the real problems hide. Ask them what slows them down, what confuses them, and where errors usually pop up. Here's how you should break down the core stages:  

• Invoice receipt: Does your AP team get invoices through email, postal mail, vendor portals, or direct hand-delivery from property staff? Each channel has different processing requirements.
• Data capture and verification: How do you extract key details? Do you verify the accuracy of this data against purchase orders, contracts, and work authorizations? This includes checking vendor information, amounts, and property assignments.
• Routing for approval: Do the invoices get forwarded to appropriate approvers based on dollar amounts, property locations, and expense categories? Remember that the approval matrix determines who signs off on what.
• Approval or rejection: Approvers either approve, reject, or request additional information. How does your team handle rejections? Do they require detailed explanations and communicate with the vendor?
• Payment authorization: Once approved, AP schedules and releases payment. Does your team do this based on your company's terms? 

Once you've mapped this out, you'll start to see the gaps. Maybe approvals stall when one person is on vacation. Or some payments are made without verifying the accuracy of data against POs and receipts. 

Establishing Approval Hierarchies

Having dedicated invoice reviewers isn't enough. Without clear approval hierarchies and structure, even the best teams create confusion, and invoices bounce around between departments or get stuck on someone's desk. To avoid that, always set up a formal approval structure. 

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For example, define exactly who handles invoice submission, validation, review, and final approval. If your firm is large, assign department heads to approve invoices for their specific areas. For instance, maintenance supervisors handle repair bills, leasing managers approve marketing expenses, and regional directors oversee capital improvements. When structuring the approval hierarchy, consider these three key factors:  

• Invoice amount: Smaller charges like monthly landscaping for one property might only need a quick review. However, larger ones, like a six-figure renovation, should go through multiple levels of scrutiny and approval.
• Vendor type: New vendors or those requiring compliance checks, like those dealing with regulated services or high-value contracts, need to go through more thorough reviews.
• Department: Invoices tied to specific departments get routed directly to their manager. That way, no one outside of marketing is signing off on ad spend, and no one in leasing is approving IT subscriptions.

Automation Opportunities

The real magic in improving invoice approval workflow is automation. Gartner reports show that automation can cut invoice processing costs by up to 75%. Note that the time and resource savings benefit everyone, from property managers and accounting teams to vendors. 

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Automation eliminates repetitive tasks like sending approval notifications, tracking assignments, and following up on overdue reviews. It standardizes your processes, centralizes data, and provides self-service options that speed up vendor onboarding. Here's where you can automate to reap the biggest wins:

Invoice Receipt and Data Capture

As soon as an invoice hits your system, whether it comes by email, an online portal, or scanned mail, the automated AP platform picks it up automatically. The software then uses optical character recognition with AI to extract key data points. It pulls supplier details, dates, amounts, tax numbers, and purchase order references. This minimizes the chances of misplaced documents, eliminates human error, improves efficiency, and reduces the handling costs. 

Invoice Reconciliation

Automated matching instantly flags discrepancies that used to take hours of manual review. The system performs three-way matching automatically, comparing invoice details against purchase orders and delivery receipts. If something doesn't line up, such as the billed quantity failing to match the goods received, the invoice gets flagged for review.

Approval Routing and Live Updates

Once the invoice is verified, it's routed to the right approver based on preset hierarchy rules such as amount thresholds, department, and vendor category. Approvers receive instant notifications with all necessary information. They can approve, reject, or escalate with a single click, even from their phones. 

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The system supports multi-level sign-offs and logs every action for audit trails. Then it keeps everyone in the loop. Vendors can log into a portal to check their payment status instead of calling your office,  and internal teams can track where an invoice is in the pipeline without bugging the AP. 

Approval Requests

Without automation, approvers have to dig through email attachments or printed copies, cross-reference PO numbers, and then remember to reply or physically sign and return something. Sometimes someone would forget or miss the deadline, and you'd get hit with late fees or upset vendors. 

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Now, with automation, approvers get a clean digital dashboard that shows every detail they need, such as vendor info, invoice total, due dates, PO numbers, and account codes, all in one place. The system also sends reminders about approaching deadlines. What's even better is that some systems allow you to review and approve urgent invoices from your phone. 

Invoice Coding

Automated coding eliminates one of the biggest headaches in property management accounting: manually assigning GL accounts, cost centers, and project codes to hundreds of invoices. The system uses AI and rule-based logic to recognize the vendor, the type of service, and even the location, then applies the correct GL account and cost center based on predefined rules. 

Controls & Audit Trail Must-Haves

A comprehensive audit trail is your best defense against fraud, errors, and compliance issues. The accounts payable audit trail creates a detailed chronological record of every financial transaction from invoice receipt through final payment. It shows who touched what, when, and why. This systematic documentation tracks approvals, captures modifications, monitors system access, and maintains historical records for audits and regulatory compliance. Here are five critical components that make audit trails effective.

• Transaction details: Every invoice entry should include comprehensive details such as amounts, descriptions, vendor information, property assignments, GL codes, and supporting document references. This complete record allows auditors to verify accuracy and trace transactions through your entire financial system.
• User identification: You need to know exactly who's doing what inside the AP system. Your audit trail should capture the name, role, or login ID tied to every transaction or approval step. This creates clear accountability for every action taken.
• Timestamps: Every action in your system should be automatically timestamped with precise date and time information. These timestamps create an accurate sequence of events that auditors can follow step by step.
• Change history: Change history records when someone updates a vendor profile, edits an invoice, changes coding, adjusts approval paths, or changes user permissions. And most importantly, it shows who made the change, when, and often why.  
• System-generated logs: This is the behind-the-scenes stuff, such as logins, IP addresses, failed access attempts, data uploads, and system errors. The logs will alert you to security threats, and help troubleshoot processing issues.

Sample 5-Step Workflow Diagram

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Checklist: Monthly Workflow Health Audit

Tracking key performance indicators gives you concrete data about efficiency, effectiveness, and problem areas that need attention. Every month, run a quick audit on your invoice approval workflow and track the right KPIs, such as:

• Average time to approve an invoice
• Invoices processed per day
• Error rate, such as coding mistakes and missing POs
• Number of duplicate payments flagged or prevented
• Percentage of invoices requiring manual intervention

Sit down with these metrics and look for trends. For instance, if the percentage of duplicate payments made keeps declining month after month, it means you're on the right track. 

Conclusion

Property management invoice approval processes are complex, and manual processes eventually break down under human error, delayed approvals, compliance gaps, and fraud. The solution is to get end-to-end automation systems designed specifically for the industry's unique challenges. One of the best automated APs you can use is LeapAP, as it's specifically tailored for property management, including residential, commercial, HOAs, and condos. 

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LeapAP cuts costs by up to 80%, mostly by removing repetitive manual steps like data entry, invoice matching, and chasing approvals. The software handles data extraction automatically, routes invoices to the right people, and the payment module handles the payment once the invoices are approved. 

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