Accounts payable automation software helps businesses manage invoices, approvals, payments and financial records with less manual processing. Instead of entering every invoice by hand and sending documents between employees for approval, AP automation platforms can capture invoice information, match it with purchase orders, route it to the right people and connect the transaction with accounting software.
For businesses comparing accounts payable automation software, however, the differences between platforms can be substantial. Pricing models, integrations, payment capabilities, invoice processing and approval workflows can all vary.
This guide explains how AP automation works, what it can cost, which features businesses should compare and how it relates to invoice automation and cloud accounting software.
What Is Accounts Payable Automation Software?
Accounts payable, usually abbreviated to AP, covers the money a business owes suppliers and other creditors.
A traditional accounts payable process might involve receiving an invoice by email, downloading the document, entering its information into accounting software, checking it against a purchase order, requesting approval and finally arranging payment.
Accounts payable automation software is designed to automate or simplify parts of that workflow.
Depending on the platform, AP automation can include:
- Invoice capture and data extraction
- Automated invoice processing
- Purchase order matching
- Approval workflows
- Supplier management
- Payment processing
- Accounting software integrations
- Expense management
- Financial reporting
- Audit trails and document storage
The appropriate system depends heavily on the size and complexity of the business.
A small company processing a relatively low number of invoices may primarily want automated invoice capture and accounting integration. A larger organisation could require multiple approval levels, purchasing controls, international payments and integration with an enterprise resource planning system.
Best Accounts Payable Automation Software: What Should You Compare?
There isn't one accounts payable automation platform that is appropriate for every business. Comparing the underlying features is therefore more useful than choosing software solely because it has the longest feature list.
Automated Invoice Capture
Invoice capture is one of the fundamental features of AP automation software.
Rather than manually typing information from an invoice into an accounting system, invoice automation software can extract details such as:
- Supplier name
- Invoice number
- Invoice date
- Purchase order number
- Tax information
- Payment terms
- Line items
- Total amount
Some systems use optical character recognition, commonly called OCR, alongside other document-processing technologies.
Businesses should check which document formats are supported and what happens when the software cannot confidently interpret an invoice.
Invoice Approval Workflows
Approval workflows determine who needs to review an invoice before it can be paid.
For example, a company might automatically send invoices under a certain value to a department manager while invoices exceeding a specified threshold require additional approval.
When comparing AP automation software, consider whether approval rules can be customised around:
- Invoice value
- Supplier
- Department
- Business entity
- Purchase order
- Cost centre
- Project
The ability to view outstanding approvals can also help finance teams identify invoices that are delaying the accounts payable process.
Purchase Order Matching
Businesses using purchase orders may want automated matching.
A system can compare an invoice against the relevant purchase order and, where applicable, records showing that goods or services were received.
This can help identify discrepancies before an invoice is approved.
More complex organisations should investigate whether a platform supports the particular matching processes their purchasing system requires.
Accounting and ERP Integrations
Integration is particularly important because AP software rarely operates completely independently.
Businesses may need the platform to communicate with cloud accounting software or an enterprise resource planning system.
Before buying an AP automation product, check whether it integrates with your existing accounting environment and exactly what information is synchronised.
An advertised integration does not necessarily mean every field, workflow or business process is supported.
Payment Automation
Some accounts payable platforms extend beyond invoice processing and help businesses make supplier payments.
Capabilities can include domestic payments, international payments and payment scheduling.
Businesses considering payment automation should examine transaction fees, supported currencies, foreign-exchange charges, payment methods and the controls used to authorise payments.
Accounts Payable Automation Software Costs
The cost of AP automation software varies significantly.
There is no universal price because providers can charge according to different measurements.
Common pricing models include:
- Monthly subscriptions
- Per-user charges
- Per-invoice fees
- Transaction fees
- Payment fees
- Usage-based pricing
- Custom enterprise contracts
There may also be implementation or integration costs.
Cost Per Invoice
For organisations processing large numbers of invoices, the effective cost per invoice can become an important metric.
A subscription that initially appears inexpensive may become considerably more expensive when additional document-processing or transaction charges are included.
Businesses should estimate their expected monthly invoice volume before requesting pricing.
For example, calculate approximately how many invoices are processed each month and how many legal entities, users and approval workflows need access to the system.
This makes comparing different pricing structures easier.
Implementation Costs
The software subscription isn't necessarily the complete cost.
Implementation can involve:
- Accounting system integration
- ERP integration
- Workflow configuration
- Supplier setup
- Data migration
- Employee training
- Custom development
- Technical support
A relatively simple cloud accounting integration could require much less work than deploying accounts payable automation across a multinational organisation with several entities and financial systems.
Payment and Transaction Fees
If the AP platform also processes payments, investigate payment fees separately from the core software price.
Check for charges associated with domestic transfers, international payments, currency conversion and alternative payment methods.
Businesses operating internationally should pay particular attention to exchange rates and foreign-exchange fees.
Request the Total Cost
Before committing to a platform, ask the provider to explain the expected total cost based on your actual usage.
Useful questions include:
- Is there a minimum monthly commitment?
- Are there per-invoice charges?
- Are additional users charged separately?
- Does invoice volume affect pricing?
- Are accounting integrations included?
- Is implementation charged separately?
- Are payment transactions charged separately?
- Are international payments more expensive?
- Is customer support included?
- What happens if invoice volume increases?
This provides a much more meaningful comparison than looking only at the advertised starting price.
How Automated Invoice Processing Works
Automated invoice processing is one of the central components of accounts payable automation.
The precise workflow varies between platforms, but it commonly follows several stages.
Step 1: Invoice Received
A supplier sends an invoice.
Depending on the AP automation platform, invoices might be received through email, uploaded directly, submitted through a supplier portal or transferred electronically from another system.
Step 2: Invoice Data Captured
Invoice processing software extracts relevant information from the document.
Instead of an employee manually entering each field, the system attempts to identify the supplier, invoice number, dates, amounts and other required information.
This can significantly reduce repetitive data entry, although businesses should still have processes for reviewing exceptions and incorrect information.
Step 3: Invoice Checked
The platform may perform checks before sending the invoice for approval.
These can include identifying possible duplicate invoices and matching invoices against purchase orders.
An invoice that meets predetermined rules might progress automatically, while an invoice containing a discrepancy can be sent for manual review.
Step 4: Approval
The invoice enters the company's approval workflow.
AP automation software can determine the appropriate approver based on predefined business rules.
Approvers can then review the invoice and supporting information before approving or rejecting it.
Step 5: Accounting System Updated
Once approved, relevant information can be transferred to the company's accounting software or ERP system where supported by the integration.
This reduces the need to enter the same information into several systems manually.
Step 6: Payment
If payment functionality is included, the approved invoice may then enter the payment process.
Payment automation does not necessarily mean money is sent without human oversight. Businesses can configure authorisation requirements and other financial controls according to the capabilities of the platform.
Cloud Accounting Software for Businesses
Accounts payable automation and cloud accounting software overlap, but they are not necessarily the same product.
Cloud accounting software provides broader financial management capabilities. Depending on the system, these can include:
- Bookkeeping
- Accounts payable
- Accounts receivable
- Bank reconciliation
- Invoicing
- Payroll
- Expense management
- Tax-related records
- Financial reporting
Dedicated AP automation software concentrates more specifically on supplier invoices, approvals and payments.
Do You Need Separate AP Automation Software?
Some businesses may find that the accounts payable features built into their existing accounting software are sufficient.
Others may need specialist AP automation.
The decision often depends on factors such as:
- Number of invoices processed
- Number of employees approving invoices
- Number of suppliers
- Number of business entities
- Complexity of approval workflows
- International operations
- Existing ERP or accounting system
- Purchasing processes
- Payment requirements
A small business processing a modest number of invoices could reasonably prioritise simplicity.
A finance department processing thousands of supplier invoices may place much greater value on automated data capture, matching, approvals and exception management.
Cloud Accounting Software Integrations
If you already use cloud accounting software, start by checking compatible AP automation integrations.
Look beyond whether the two products simply "integrate."
Determine what the integration actually does.
Questions worth asking include:
- Are suppliers synchronised?
- Are invoices synchronised?
- Are purchase orders supported?
- Are payment records synchronised?
- How frequently does data update?
- Are attachments transferred?
- Are multiple entities supported?
- What happens when an integration fails?
Understanding these details before implementation can prevent significant operational problems later.
AP Automation vs Traditional Accounts Payable
The main difference between automated and traditional accounts payable is how much manual work is required throughout the invoice lifecycle.
Traditional Accounts Payable
A predominantly manual process can involve employees:
- Receiving invoices
- Downloading or printing documents
- Entering invoice information
- Finding the corresponding purchase order
- Emailing invoices for approval
- Following up with approvers
- Updating accounting records
- Arranging supplier payments
- Filing documentation
This may be manageable for businesses processing relatively few invoices.
As invoice volume increases, however, manual processing can consume considerably more staff time.
Automated Accounts Payable
AP automation software attempts to turn the same process into a structured digital workflow.
Invoices can be captured electronically, information extracted, documents matched against purchasing records and approvals routed automatically.
Employees then concentrate more heavily on exceptions requiring human judgement.
Automation can also create a central record of what happened to an invoice, including when it was received, who approved it and when it progressed through the workflow.
Benefits Businesses Look for From AP Automation
Companies investigate accounts payable automation for several reasons.
Less Manual Data Entry
Automated invoice capture can reduce the amount of invoice information employees need to type manually.
This can be particularly valuable for organisations processing substantial invoice volumes.
Faster Approval Workflows
Automated routing can send invoices directly to the appropriate person rather than relying on employees manually forwarding documents.
Notifications can also remind approvers about outstanding invoices.
Better Visibility
A central AP platform can make it easier for finance teams to see where an invoice is in the process.
Instead of searching through email conversations, employees may be able to determine whether an invoice is awaiting review, approved or scheduled for payment.
Consistent Financial Controls
Configurable approval workflows can help businesses apply their internal purchasing and payment policies more consistently.
However, automation should complement rather than replace appropriate financial controls.
Features to Compare Before Choosing AP Automation Software
Before requesting demonstrations or quotes, create a list of requirements.
A useful AP automation software comparison should consider:
Invoice processing
Check supported invoice formats, automated data extraction and exception handling.
Approval workflows
Determine whether approval rules can reflect the way your organisation actually operates.
Purchase orders
Check whether two-way or three-way matching is required and supported.
Accounting integration
Confirm compatibility with your current cloud accounting or ERP software.
Payments
Determine whether supplier payment capabilities are required.
International capabilities
Businesses operating internationally should investigate currencies, payment methods, localisation and entity support.
Security
Ask providers about access controls, authentication, encryption, audit logs, data handling and relevant certifications.
Reporting
Check whether finance teams can analyse invoice processing, approvals and payments using the information they need.
Scalability
Consider what happens if invoice volumes, employee numbers or business entities increase.
Support
Understand what onboarding and ongoing technical support are included in the contract.
How to Compare AP Automation Providers
Start with your existing accounts payable process rather than immediately comparing software brands.
Document how an invoice currently moves through the organisation.
Identify:
- Where invoices arrive
- Who enters the information
- Who approves invoices
- Which invoices require purchase orders
- Which accounting systems are involved
- How payments are authorised
- Where delays occur
- Which tasks require the most manual work
You can then evaluate AP automation software against genuine operational requirements.
Request a Demonstration
A product demonstration is most useful when it reflects your actual workflow.
Rather than simply watching the provider's standard presentation, ask them to demonstrate scenarios your finance department encounters regularly.
For example:
"Show us what happens when an invoice does not match its purchase order."
Or:
"Show us how an invoice requiring three levels of approval would be processed."
This can reveal much more about a platform than a feature checklist.
Compare Like for Like
When requesting pricing, provide competing vendors with approximately the same information about invoice volumes, users, entities and required features.
Then compare:
- Software subscription
- Implementation
- Integrations
- Invoice processing charges
- Payment charges
- Support
- Contract duration
- Additional usage costs
The cheapest advertised subscription is not necessarily the least expensive system overall.
Is Accounts Payable Automation Worth It?
That depends on the organisation.
A small business with a straightforward accounts payable process may already have sufficient functionality through its existing cloud accounting software.
For organisations handling larger invoice volumes or complicated approval processes, specialist AP automation software can potentially remove substantial repetitive administrative work.
The important calculation is therefore not simply the price of the software.
Businesses should compare the total cost of the system with their current AP process, including employee time, invoice volumes, implementation requirements and the value of improved workflow visibility.
Questions to Ask Before Buying AP Automation Software
Before selecting a provider, ask:
- How is pricing calculated?
- Which accounting platforms are supported?
- What information does the integration synchronise?
- How does automated invoice capture work?
- How are exceptions handled?
- Can approval workflows be customised?
- Does the platform support purchase order matching?
- Can it support multiple companies or legal entities?
- Which payment methods and currencies are available?
- What payment and foreign-exchange fees apply?
- What security controls are available?
- How long does implementation normally take?
- What training is provided?
- What customer support is included?
- What happens to our data if we leave?
Get important commitments confirmed in the provider's documentation or contract rather than relying solely on a sales demonstration.
Final Checklist
Before choosing accounts payable automation software:
- Calculate your monthly invoice volume.
- Map your current invoice approval process.
- Identify your accounting or ERP integration requirements.
- Decide whether you need automated purchase order matching.
- Determine whether supplier payments should be included.
- List any international payment or multi-entity requirements.
- Compare implementation costs as well as subscription prices.
- Ask each provider for pricing based on the same usage assumptions.
- Test your real-world workflows during demonstrations.
- Review security, support and contractual terms before purchasing.
Accounts payable automation can range from relatively straightforward invoice processing software to sophisticated financial automation platforms handling invoices, approvals, purchasing integrations and supplier payments.
The best approach is to identify where manual work currently occurs and then compare AP automation software based on how effectively it addresses those specific problems.
That also makes it easier to determine whether you need dedicated accounts payable automation software at all, or whether the AP capabilities already included with your cloud accounting software are sufficient.