Finance Operations and Controls
How to Design an Invoice Approval Process
Who raises, who reviews, and when a final approval is needed. Five decisions that give you an invoice approval process which catches errors without slowing billing down.
An invoice approval process is the set of checks an invoice passes before it reaches your customer. Done well, it catches the wrong amount, the missing TIN and the duplicate before they cost you a credit note. Done badly, it becomes the reason invoices go out a week late. This guide treats the design as five decisions, then puts them together into a one-page policy you can adapt.
If you're new to the idea, start with What Is an Approval Workflow?, which covers the general principles.
Decision 1: Who raises invoices?
Name the roles that can create an invoice, not the people. Typical choices:
- A billing officer in a business that invoices daily.
- Account managers in a professional services firm, who know what was delivered.
- The bursary in a school, raising termly fee invoices.
Keep the list short. Every person who can raise an invoice is a person whose work needs checking.
Decision 2: Who reviews them?
The reviewer is usually an accountant: someone who knows the customer terms, the tax treatment and the numbering. The rule that matters most is that the reviewer is never the person who raised the invoice. If a billing officer is also allowed to review, they must not review their own.
Name a deputy reviewer for leave and busy weeks. An approval process with one reviewer is an approval process that stops in December.
Decision 3: When is a final approval needed?
A second, final approval adds a senior check for the invoices that carry the most risk. You have three options:
| Option | When it suits | Trade-off |
|---|---|---|
| Never | Small teams with low, predictable invoice values | One check only; rely on the reviewer |
| Always | High-value, low-volume billing, such as large contracts | Slower; the final approver sees everything |
| Above a threshold | Most growing businesses | Large invoices get two checks; routine ones move quickly |
For the threshold, look at last quarter's invoices. If most fall between ₦150,000 and ₦800,000, a threshold of ₦1,000,000 sends only the unusual ones to the MD. Review it every quarter.
Decision 4: What does the reviewer check?
Reviewers work faster and more consistently with a checklist. A practical one:
- The customer is right, including the legal name, TIN and RC number for company customers.
- The billing contact is right, with a CC for the customer's accounts team where they've asked for one.
- Line items match the contract, quote or enrolment: quantity, rate and description.
- VAT is applied correctly at 7.5% where the supply is VATable, and not where it isn't.
- Any WHT treatment the customer has told you about is reflected.
- The billing period and due date are right.
- It isn't a duplicate of an invoice already sent this period.
- The invoice number follows your sequence.
For what a complete invoice should contain, see How to Write a Professional Invoice in Nigeria. For the tax side, see VAT in Nigeria and Withholding Tax in Nigeria.
Decision 5: What happens when something's wrong?
An approval process needs a clear "no". The reviewer returns the invoice to the person who raised it, with a reason written down, for example "Rate should be ₦85,000 per learner, not ₦80,000". The raiser fixes it and resubmits, and it goes through review again.
Two rules keep this clean:
- Returned invoices are never sent. Only a fully approved invoice goes to the customer.
- The reason is kept. Six months later, the record shows why the amount changed.
A worked example
Here's one invoice through the process at a logistics company in Ikeja.
| Time | Step | Who |
|---|---|---|
| 09:12 | Invoice INV-2026-0418 raised: ₦1,250,000 + ₦93,750 VAT = ₦1,343,750 | Billing officer |
| 09:41 | Reviewed against the contract and checklist; approved | Chiamaka Obi, accountant |
| 09:41 | Over ₦1,000,000, so routed for final approval | (automatic) |
| 10:06 | Final approval | Tunde Bakare, MD |
| 10:06 | Emailed to the customer with a link to pay | (automatic) |
Under an hour from raised to sent, with two named approvals on record. Compare that with an invoice that waits for the MD to reply on WhatsApp.
Turnaround: keeping billing moving
A process that catches errors but delays every invoice by three days will be quietly bypassed. Set expectations:
- Reviewers clear their queue daily, or twice a day at month-end.
- Final approvers get a short list, not every invoice. That's what the threshold is for.
- Track what's waiting. Anything in review for more than two working days should be visible to the finance manager.
Your one-page policy
Adapt this and share it with everyone who touches invoices:
Invoice approval policy, Adebayo & Co. Logistics
- Invoices are raised by the billing officer or account managers.
- Every invoice is reviewed by an accountant who did not raise it. Deputy: the finance manager.
- Invoices of ₦1,000,000 or more, including VAT, also need final approval from the MD. Deputy: the finance director.
- Reviewers use the invoice checklist. Invoices with errors are returned to the raiser with a written reason.
- Only fully approved invoices are sent to customers.
- Reviewers clear their queue every working day. The threshold is reviewed every quarter.
Every one of those steps should leave a record. That record is your audit trail.
How Flux helps
In Flux, the person who raises an invoice sends it to an accountant for review. You set final approval to always, never, or above a naira threshold, and separation of duties stops anyone approving their own invoice. Returned invoices go back to the raiser, and invoices are emailed to customers only once they're approved, with a secure Pay online link. Company customers carry their TIN, VAT and RC numbers and billing contacts, so reviewers have what they need in one place. See Invoicing & Billing.