AP automation guide 2025: Best practices and ROI insights

Whether you have a sprawling accounts payable (AP) network or straightforward payment operations, manual processes can drain your internal resources. Paper-based workflows require AP teams to commit valuable time to verify invoices and track down approvals—time they could otherwise spend on finding innovative ways to drive cost savings and remove inefficiencies.

This is where accounts payable automation software comes in. It supports accounts payable departments by reducing errors and speeding up AP approval processes. Your first step is assessing your current operations to understand your needs and invoice processing costs. Then, you’ll need to vet possible solutions to find the best fit for your organization. Here’s your guide to accomplishing it all.  

What is accounts payable automation?

Accounts payable process automation involves using technology to digitize AP workflows from end to end. In doing so, you remove tedious tasks, such as manual data entry, from your plate.

An AP automation solution allows you to set the guidelines for this process. From there, it handles supplier invoice validation, stakeholder approvals, data capture, and payment scheduling. The resulting workflow is a smooth, accurate, and reliable process that can save time and resources.

How does AP automation work?

Once a vendor fulfills an order and sends the invoice, AP teams take over with the following steps:

1. Data entry into an enterprise resource planning (ERP) system: Add invoice data into your ERP system or netsuite. 

2. Two- or three-way matching: Compare invoices, purchase orders (PO), or receipts to verify that all invoice details are accurate and consistent.

3. Invoice approval workflows: Seek out stakeholders who need to approve payments before you can release the funds.

4. AP schedules the payment: Schedule the vendor payment once all stakeholders approve the invoice and your team is ready to release funds. 

    

Depending on your procurement tech stack, your tools may use one or several of the following kinds of technology for invoice automation:

• Optical character recognition (OCR): Scan documents and convert them into text so you can turn PDFs or screenshots into standard documents to more easily verify invoice, PO, and receipt accuracy. 

• Robotics process automation: Set rules within the automation system for how it should handle standard tasks to streamline processes and promote accuracy.

• AI and machine learning (ML): Detect fraud, automate data extraction, and predict future market conditions using AI and ML technology, with the help of either OCR or natural language programs.

   

You’ll often see these kinds of technology in a single solution. This grants your AP department the power to automate crucial yet conventional payment process tasks. 

What AP tasks can you automate?

Instead of being hands-on in every step of the process, imagine only jumping in to resolve discrepancies and approve funds. 

To achieve this, automate these tasks to reclaim time in your day:

• Extract data from your documents: Pull data from invoices, POs, and receipts, then centralize it for long-term data storage and easy document matching.

• Match invoices to purchase orders: Link all these documents to ensure that their information matches before you authorize payments. 

• Send notifications to approvers: Notify stakeholders when they need to approve payments instead of tracking everyone down manually.

• Schedule the payment: Automatically set a payment date once the AP software completes the earlier steps. 

   

An effective solution collects data from each of these steps and places it in a central dashboard—that way, you have real-time data whenever you need it, among a host of other benefits. 

The benefits of AP automation

We’ve touched on how AP automation saves time—but the benefits go further than that. Here’s what AP automation can do for you:

• Reduce the risk of error: An automated invoice matching and approval process reduces the potential for human error. 

• Implement reliable fraud detection: With the help of automation software, your team can spot suspicious invoices or discrepancies and flag them for a closer look. 

• Maintain efficient internal operations: You may reduce the time you spend entering invoice data, matching documents, and seeking approvals with automation. 

• Make on-time payments: Automated processes streamline some of the steps before payment, reducing the odds of delays and potentially leading to early payment discounts. 

• Extract and centralize purchasing analytics: By storing all your AP process data under one roof, you can get visibility into your operations and can therefore make impactful business decisions. 

   

Automation software lifts some of the weight off AP finance teams across the entire invoice process. Your chances of getting the benefits of AP automation increase when you pick the right tool. 

How to choose your AP automation software

As you narrow down your options for AP automation software, consider the following:

• Digital invoice processing: Choose a solution that converts all kinds of documents into digital formats so you can easily pull data for invoice matching and data centralization. 

• Integrations with existing systems: Make sure any new solution seamlessly connects with your current software for a cohesive procurement process with accurate data.

• Built-in analytics and reporting: Look for a solution that collects data so you can quickly generate data reports and iterate on your processes to maximize efficiency. 

• Security and compliance features: Adopt a solution with built-in security and compliance features to keep your organization’s important information safe.

• Vendor relationship management tools: Track vendor invoices, performance, and contracts to monitor the state of your supplier relationships at all times. 

• Flexible payment options: Find software that provides flexible invoice payment options so you can pay in a way that makes sense for your organization.

   

AP automation relieves the pressure your team faces when striving for accuracy and efficiency in routine invoice management tasks. It can additionally free up their time so they can focus on optimizing larger parts of your accounting system to drive cash flow.

Here at Amazon Business, providing procurement teams with the resources they need to stay efficient and accurate in their daily work is our top priority. Our solution allows you to process invoices faster—like with a mobile app that allows you to three-way match on the go. That way, your entire procure-to-pay workflow runs smoother, remains accurate, and allows your team to grow.

How to implement AP process automation

Adopting new AP automation technology can be as easy as using it. Follow these simple steps to get started:

1. Assess your AP automation needs: Review your current workflows to find bottlenecks or places that are prone to error to determine your needs. 

2. Choose the right AP automation software: Build a list of options and compare them, based on your needs, to make a data-driven decision.

3. Implement electronic invoicing: Transition your invoices from paper to digital documents.

4. Set up automation workflows: Create guidelines for automating steps in the AP process, including alerting stakeholders during approval stages. 

5. Support and train employees: Provide AP teams with the resources they need to learn the new solution. 

    

Rolling out new automation technology is easy—but keep in mind that factors beyond your control could create hurdles. 

AP automation challenges (and how to overcome them)

As with any new technology, you may encounter pain points as you automate your AP operations. Here’s how you can solve the most common adoption problems:

Integration issues and IT roadblocks

Get your IT team in the loop from day one. Doing so gives them ample time to back up current data and run risk analyses to pinpoint potential integration issues. Additionally, use this time to create how-to integration documentation for AP teams and iterate on it as you get feedback. 

Slow adoption and resistance to change

Any new software or change to your process may make employees hesitant. They could feel overwhelmed by the idea of learning a new workflow or solution on top of their daily work. 

Take a compassionate approach by providing AP teams with the resources they need to smoothly adopt the new software. Make sure they know how the solution will make their day-to-day work lives easier once it’s up and running. 

Disorganized AP automation process

If you primarily rely on manual processes, there’s a risk of disorganized AP workflows. Because of this, it’s worth documenting and auditing your existing workflows. In doing so, you capture a snapshot of how things look now to compare with automated test versions. This will help you uncover duplicate steps, errors, or conflicts later on that could prevent the solution from being as helpful as possible. 

The transition from hard copies to digital

Just because you’re rolling out robust digital AP solutions doesn’t necessarily mean your suppliers will do the same. You have a couple of options for handling this:

1. Use AP automation software with OCR to seamlessly convert paper invoices into digital data sources. Look for a solution that also features vendor self-service portals for the utmost ease of use.

2. Build a step-by-step vendor onboarding plan that highlights training resources to support your suppliers throughout the entire workflow.

    

Compliance and security gaps

An automation solution that handles important purchasing data needs to have multi-layer security. This should include features like automated fraud detection to flag suspicious activity and built-in audit trails of all users’ activity. Additionally, look for a solution that features role-based access controls so AP teams can only access the information they need for their work. 

How to measure AP automation ROI

Before you officially roll out a new solution, establish AP automation key performance indicators (KPIs) that impact your overall revenue stream. These will tell you the effectiveness of your strategy. 

Here are some of the most common KPIs you can use:

• Average invoice processing time: Track how long it takes from when an invoice arrives to when your stakeholders approve the payment.

• Invoice exception rate: Record the number of invoices that your AP team will need to pull aside for further investigation due to errors. 

• Rate of on-time payment: Measure how often you pay vendors on time, per the contract’s conditions. 

• Total cost to process an invoice: Calculate the total cost of processing an invoice, from the moment it lands in AP to when the team releases payment.

• Number of processed invoices: Count how many invoices you process within a given time frame, both before and after you adopt an automated solution. 

   

Together, these KPIs indicate your new process's efficiency and accuracy. But keep in mind that you’ll need to give the new process some time to gather data before you can assess it. 

Increase efficiency with Amazon Business’s AP automation solutions

From ERP integrations to invoice data capture, AP automation solutions cover the basics of your financial operations. The trick is finding the right software for your team.

Our solution provides you with robust integrations and flexible payment options so you can customize it to work for you. We also integrate with software solutions such as SpendBridge to streamline invoices, budgets, and spend analytics. Valuable resources like this can help you stay up to date on the latest procurement trends, technology, and tips to optimize your operations.

Ready to get started? Contact our sales team today to learn how we can integrate our seamless procurement solutions into your AP automation strategy.