Q&A: “How To AutomateAccounts Payable”, & 5 More Of Your Questions Answered

Terms like "optical character recognition" and "ERP integration" can make accounts payable automation feel complicated. But beneath these technical terms, there are straightforward solutions that simplify accounts payable (AP) processes.

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To help you make sense of AP automation, we've answered the most common questions about AP automation, including how to get started, what to look for in software solutions, and whether it's worth the investment in 2025 and beyond.

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Q1: How to automate accounts payable?

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Automating accounts payable requires a structured approach to ensure a smooth transition for AP teams and maximise the benefits for businesses. Automating accounts payable typically involves these key steps:

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● Planning: Start by mapping your current AP processes, identifying bottlenecks, and defining desired outcomes. Involve stakeholders from various departments, such as finance, IT, and procurement, to gather insights, ensure organisational buy-in, and find the most suitable AP automation system.

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● Data migration: Work closely with your AP automation vendor to ensure seamless data transfer and integration with your existing financial systems, ERPs, and other relevant applications. This will minimise disruptions and ensure data integrity.

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● Training: Change management is essential for user adoption and successful implementation. Provide comprehensive training to AP staff and other stakeholders on the new system's features and workflows, and any new protocols such as data collection methods. Clearly communicate the benefits of the new invoicing process, addressing any concerns or resistance to change.

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● Monitoring: Regularly review performance metrics, identify areas for improvement, and implement process optimisations. Leverage the system's reporting and analytics capabilities to gain insights and drive continuous improvement.

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By following these steps, businesses can effectively implement accounts payable process automation to streamline operations, reduce costs, and enhance financial visibility and control.

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Q2: How does accounts payable software work?

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AP automation software is designed to streamline and optimise the accounts payable process through a combination of features. It uses technologies such as optical character recognition (OCR) and machine learning to automate the capture and extraction of invoice data from various sources, including paper documents, PDFs, and electronic invoices. This eliminates the need for manual data entry, reducing errors and saving valuable time for AP teams.

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AP automation software also includes features like automated approval workflows and seamless integrations with existing ERPs or accounting systems like Xero. This integration facilitates real-time data synchronisation, providing businesses with a centralised view of their financial operations and enabling better visibility, control, and decision-making across the organisation.

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By automating the entire invoice processing workflow, from data extraction to approval routing and payment processing, AP automation software ensures a seamless and efficient accounts payable process.

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Q3: Can accounts payable automation capture early payment discounts?

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Manual invoice processing often results in delays and inefficiencies, leading to missed opportunities for early payment discounts offered by suppliers. These discounts can represent significant cost savings for businesses, but they are frequently overlooked due to the time-consuming nature of traditional accounts payable processes.

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An accounts payable automation solution can accelerate the invoice processing workflow by automating data entry, routing approvals, and facilitating timely payments. This streamlined approach ensures that invoices are processed promptly, enabling businesses to take advantage of early payment discounts before they expire.

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Q4: What are the main benefits of AP automation?

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Some of the reasons businesses of all sizes are adopting AP automation solutions include:

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● Improved operational efficiency: By eliminating manual tasks, AP automation reduces processing times, leading to significant operational efficiencies and cost savings from reduced manual labour.

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● Reduced risk of errors: A manual accounts payable process is more prone to errors (e.g. inaccurate invoice data, duplicate payments). Accounts payable automation software uses OCR and AI technology to automatically extract invoice data, eliminating manual data entry errors. AP software can also identify duplicate invoices before they are paid out.

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● Protection against fraud: Automated data entry, validation checks, and approval workflows minimise the risk of fraudulent invoicing, which is a significant cybersecurity issue for businesses today.

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● Enhanced cash flow management: Real-time visibility into invoice statuses, payment due dates, and financial commitments enables better cash flow forecasting and working capital optimisation.

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● Strengthened supplier relationships: Prompt invoice processing and timely and accurate payments improve relationships with suppliers, enabling better negotiation terms and a more reliable supply chain.

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Q5: How do I choose the right AP automation software for my business?

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Choosing the right AP automation software is crucial for maximising benefits and ensuring seamless integration with your existing processes and systems. When evaluating potential solutions, consider the following factors:

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● Integration capabilities: The AP automation software you choose must seamlessly integrate with your existing financial systems, ERPs, and other business applications. Robust integration ensures data consistency, eliminates data silos, and provides a centralised view of financial operations.

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● Scalability: AP automation solutions should be able to accommodate business growth at all stages. Even if you have a small business that receives a low volume of invoices, consider solutions that can handle increasing invoice volumes and adapt to evolving business needs without disrupting operations.

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● Customisation options: Look for solutions with a range of features that can be customised to meet your specific needs. For example, ExpenseOnDemand lets users choose add-on features to meet their business requirements.

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● Support: Look for software providers that offer comprehensive support to help your AP team resolve issues quickly, minimising disruptions to business operations. This can include onboarding support, live chat assistance, and responsive troubleshooting.

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When choosing software, involve key stakeholders from various departments, such as finance, IT, and procurement, to ensure the software aligns with all departments and current systems in your organisation.

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Q6: Is AP automation worth it in 2025?

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AP automation will be crucial in 2025 and beyond as businesses strive for greater efficiency, cost savings, and competitive advantage.

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Today, business leaders recognise the challenges of traditional AP processing and are prioritising AP automation more than ever. According to recent research, nearly 71% of accounts payable leaders believe that smarter AP systems are the best way to improve accounts payable tasks and drive efficiencies.

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The benefits of AP automation, including cost savings, improved accuracy, and enhanced supplier relationships, will only become more pronounced in the years to come.

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The rise of affordable and scalable AP automation solutions like ExpenseOnDemand allows businesses of all sizes to automate their AP processes. With flexible pricing models and add-on features, companies can tailor solutions to their specific needs and budgets, eliminating barriers to adoption.

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Book a Demo with ExpenseOnDemand to find affordable solutions for automating accounts payable.

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