How to Automate Accounts Payable: 10 Steps

Plus, Corcentric’s assistance in onboarding suppliers results in better relationships between suppliers and buyers. An electronic invoice or e-invoice is a fully digital electronic exchange https://www.bookstime.com/ of an invoice between a supplier and a buyer. It is fully digital from the point of creation straight through to its approval and entry into the company’s ERP or AP system. In conclusion, AP Automation is a cornerstone in modern financial management.

• Keep track of which vendors, departments, or individuals consistently cause exceptions.
• Implementing an accounts payable automation system can significantly enhance your financial operations, but it requires careful planning and execution.
• The goal is to reduce, and often eliminate, human involvement in repetitive activities.
• A well-structured paperless AP workflow enhances collaboration across departments, allowing teams to make smarter financial decisions with real-time data insights.
• As businesses grow, invoice volumes increase, putting pressure on AP teams.
• Engage stakeholders early by communicating the vision for Agentic AI and its benefits, such as freeing staff from manual tasks so they can focus on analysis and strategy.
• Digital workers/agents process their invoices digitally, so colleagues are no longer required to print more than 1,000 pages of paper.

Invoice approval

• Divide AP responsibilities among different team members to add checks and balances.
• However, once this threshold is surpassed, errors and inefficiencies may occur more frequently, necessitating AP automation.
• Acumatica automatically offsets the correct account when the payment is applied.
• One of Asia’s largest paint manufacturers adopted an automatic invoice processing solution to tackle this burden.

This article offers a comprehensive look at accounts payable (AP) automation, covering its functions, advantages, how to implement it, and what’s next for the technology. It points out that old-fashioned, manual AP methods are slow, mistake-prone, and expensive, causing payment delays, increasing fraud risks, and damaging relationships with vendors. AP automation changes this by digitizing and simplifying the whole process from invoice to payment. This means less manual work, more efficiency, better accuracy, and greater control and visibility over finances.

Accounts Payable Process Improvements, and the Metrics to Help Measure Success

AP automation offers compelling benefits, but implementation can come with challenges. Being aware of these obstacles and developing strategies to address them is key to a smooth transition and maximizing your investment. This structured approach helps demystify the implementation process, breaking down a complex project into manageable phases and increasing the likelihood of achieving the desired outcomes. Continuously monitor system performance against KPIs; Gather user feedback; Identify areas for process optimization; Adapt and scale the solution as business evolves.

• With automation and dedicated staff, outsourcing partners can process invoices within 24–48 hours, compared to the typical 5–7 days in many in-house setups.
• A centralized system helps you track invoices efficiently, reducing lost documents and payment delays.
• That often leads to better negotiation leverage, more favorable payment terms, and potentially early-payment discounts.
• These models are trained on large datasets and try to predict the most likely next word or phrase based on patterns they’ve learned.
• Once verified, invoices need approval from relevant personnel, such as department managers or financial controllers.

Lack of visibility

Expect to see more advanced machine learning and artificial intelligence capabilities that further improve the accuracy and efficiency of AP processes. Integration with other financial systems, such as procurement and treasury management, will become more common, creating a unified platform for all your financial operations. Leading AP automation solutions providers understand that transitioning to a new system can be challenging, which is why they offer comprehensive support and training. From initial onboarding to ongoing optimization, these providers guide your team through every step, helping you get the most out of your AP automation software. Training sessions, online resources, automation FAQs, and hands-on support ensure that your staff is comfortable with the new system and can fully leverage its features.

Step 8: Emphasize Change Management

When integrated with your ERP and payment systems, AP automation becomes a core enabler of financial agility and operational resilience. Automated approval workflows enhance productivity by processing invoices automatically and ensuring efficient QuickBooks Accountant workload management, maintaining proper controls. AP automation makes it easier for employees to submit expenses by allowing them to do it digitally.

• This integrated approach, combined with expert service delivery, makes advanced AP automation accessible and transforms AP into a strategic asset.
• Process POs with high accuracy and speed and reduce risks of manual data entry.
• Compliance features for audit trails, tax regulations, and internal policies are also essential to ensure operational and regulatory standards are maintained.
• Implementing AP automation often introduces significant changes to established processes, daily tasks, and job roles within finance teams and invoice approvers across the organization.
• Your team naturally still has oversight into the system, but they also win back tons of time to be spent on thoughtful, strategic work.
• This help can be invaluable when trying something new, especially if your company has never used an online platform.

Automation includes features like duplicate payment detection and suspicious activity alerts, dramatically reducing the risk of fraud. AP automation tools deliver real-time insights into spending, enabling businesses to track expenses and manage budgets effectively. AP automation systems digitize and store all accounts payable data in a single, searchable system. This centralization simplifies access and auditing, ensuring that crucial information is readily available when needed. It uses cutting-edge IDP and NLP technologies, which allow accurate data extraction from scans, PDFs, and electronic files.

AP automation harnesses technology and software solutions to automate and simplify accounts payable processes, encompassing invoice processing, approval workflows, data capture, and payment management. The overarching goal is to minimize manual intervention, reduce errors, and expedite the entire AP cycle. Leading invoice processing software providers offer free connectors for fast, low-cost integration with top enterprise resource planning (ERP) and accounting systems.

Invoice processing involves receiving supplier invoices (via email, EDI, postal mail, or fax), classifying them by vendor or transaction type, and matching them against purchase orders when applicable. Once validated, each invoice is routed through approval workflows (often requiring multiple sign‑offs if thresholds are exceeded), posted to the ERP or general ledger, and scheduled for payment. Invoice processing is the comprehensive series of steps through which an accounts payable team manages supplier invoices, from receipt to payment, to ensure accuracy, compliance, and proper ledger recording. AP Automation from Stampli streamlines the accounts payable invoice approval process by identifying the correct approvers, sending notifications, and automating reminders. In addition, AP Automation enables businesses to keep all documents (Purchase Orders, receiving documents or receipts, and previous invoices) in one place so everyone has what they need to take action. Accounts payable (AP) automation software integrates with ERPs and is powered by artificial intelligence (AI) to automate invoice processing, expenses, vendor management, payments, and reconciliation.

The Benefits of Implementing AP Automation

Using the latest optical accounts payable automation technology character recognition (OCR) technology, AP automation solutions accurately read and capture invoice details. Automated invoice processing leverages advanced accounts payable automation technology to simplify the entire workflow, from receipt to payment, minimizing manual intervention and errors. Machine learning (ML) algorithms automate matching invoices to purchase orders and shipment receipts, reducing manual efforts and enhancing accuracy. Manual AP processes make accounts payable invoice automation difficult, causing delays and errors in invoice processing.

Oracle Fusion Cloud ERP

Adjust routing rules based on actual processing patterns and feedback from users to ensure that these process automation tools are being utilised to their fullest potential. Manual routing of invoices for approval is often slow and inconsistent, leading to delays in payment processing and potential bottlenecks in the accounts payable workflow. This can strain vendor relationships and result in missed early payment discounts. AI-based invoice processing uses artificial intelligence to automate invoice data capture with AI, extraction, recognition, validation, and processing. Furthermore, it can route the extracted data through the appropriate channels and tools for approval and payment.