Accounting Automation & Beyond

DocuPhase’s blog provides valuable insight into how your company can benefit from implementing automation & document management into existing processes.

What is AP Automation? Definition, Best Practices, Tips for Automation


Processing invoices from a few suppliers is manageable enough. But things start to get more complicated as you start working with more suppliers.

When your accounts payable department is processing invoices manually, they have to work through piles of paperwork and verify each invoice against a purchase order. Then they have to mail out checks and update your accounting system.

It’s a slow and tedious process that leaves your company vulnerable to costly mistakes and even fraud. It also makes conducting audits exponentially more difficult.

Turning to AP automation can help.

In this article, we’ll take a look at what AP automation is and how it works. We’ll also look at how you can get started with AP automation software like DocuPhase.

Click the links below to jump ahead:

What Is AP Automation?

AP automation is the use of software to automate tasks in the accounts payable process. These include entering invoices into accounting systems, verifying them against purchase orders (PO), and issuing payments to vendors.

Companies often rely on the same processes they used when they started out. These steps include: 

  1. Receive a supplier invoice
  2. Enter data into accounting software
  3. Check invoice against a PO
  4. Get invoiced approved
  5. Write and mail check
  6. File in a filing cabinet

It may sound straightforward enough, but performing these steps manually greatly increases the risk of data entry and invoice matching errors.

Manual AP processes are also extremely time-consuming. Just processing a single invoice can easily take days or even weeks for larger organizations. 60% of AP leaders cite lengthy invoice and payment approval times as one of the top AP challenges.

lengthy invoice approval

AP automation enables you to streamline and standardize invoice processing. This can help you improve vendor relationships and take advantage of early payment discounts.

How Does AP Automation Work?

Invoices can be sent to your organization in different formats — PDFs, paper invoices, Word documents, etc. However, manually entering the data from these invoices into your accounting system is tedious and prone to errors.

AP automation software typically uses optical character recognition (OCR) technology to digitally capture information from invoices, eliminating the need for manual data entry.

What’s more, some platforms also let you configure rules that automatically route invoices to one or two people for approval (e.g., invoices above certain values). 

Then once the invoice is approved, the invoice is matched against a purchase order, and the data is sent to an Enterprise Resource Planning (ERP) accounting system for record keeping.

An automated AP process can help you speed up the process and eliminate a lot of clunky manual steps, from initial purchase request or invoice to three-way matching and approval.

Automated AP Workflow

All of this happens with minimal human intervention, freeing up the AP team to focus on more important work. 

What Are the Benefits of AP Automation?

55% of executives say that accounts payable is valuable to their organization. However, these processes are often hampered by lengthy approval processes and poor visibility. If your company is still managing invoices manually, it’s time to modernize your AP processes.

Here’s how implementing an AP automation solution can benefit your company.

Eliminates Repetitive Task Like Data Entry

51% of organizations say that manual data entry and inefficient processes are one of the top AP pain points. This is followed by manual routing (37%) and lost or missing invoices (33%).

Top AP Pain Points


As members of the AP team manually input data from vendor invoices into accounting systems, mistakes are bound to slip through. Data entry errors like typos and misplaced decimal points can result in instances of duplicate payments or overpayments, both of which can negatively affect your cash flow.

What’s more, you have to spend time identifying and fixing these issues — yet another drain on valuable resources. It’s easy to see why manual data entry is one of the top AP paint points for many companies.

Implementing invoice automation software like DocuPhase helps cut down on repetitive manual tasks like manual data entry. It uses OCR technology to digitally capture invoice data and includes rules-based routing to streamline approvals.

Helps Prevent Instances of Fraud

Nearly 75% of organizations were targets of payment fraud in 2020. Common payment fraud schemes include:

  • False billing scams and unsolicited invoices from third parties
  • Business email compromise (e.g., fraudsters posing as vendors)
  • Kickback schemes (when an employee and a supplier work together)
  • Fake or duplicate invoices from employees

These instances of fraud can affect your bottom line, and even if someone from the AP team catches them in time, it will still affect productivity.

With AP automation software like DocuPhase, you can require multiple levels of approvers and set strict access controls to prevent unauthorized access to invoice workflows. It can also match an invoice against a purchase order to prevent fraudulent invoices from slipping through.

Lowers Your Invoice Processing Costs

Companies spend $12.90 on average to process a single invoice. Direct costs include expenses for paper, ink, and storage, while indirect costs include time spent manually entering data into accounting systems and chasing down signatures.

AP automation allows you to replace paper-based processes and automate the time-consuming steps that add to your processing costs. 53% of companies that have implemented AP automation solutions report lower invoice processing costs.

Invoice Processing Costs

Keeps Clear Audit Trails

An accounts payable audit is a formal assessment of your company’s financial records. It is typically conducted by internal or third-party auditors. If your company is subject to independent audits, preparing for them can be extremely tedious, especially if you’re manually processing invoices.

Using an automated AP solution helps to simplify and streamline audits. The system automatically creates audit trails for approved invoices. Since everything is centralized in a single system, it becomes easier to search and audit your records.

With DocuPhase, you can even give third-party auditors limited access to the information they need. These controls prevent independent auditors from accessing your entire ERP system.

Now let’s look at how you can automate your AP process in the next section.

How to Automate Your AP Process in 5 Steps

If you have yet to implement an AP automation solution, you’re missing out on opportunities to streamline and automate your processes.

Follow these steps to automate your AP process.

1. Define Your Accounts Payable Goals

Before you dive into automating your accounts payable process, there are a few things that you should do first to set your company up for success.

The first step is to define your accounts payable goals. This will allow you to measure progress against long-term company objectives and help you get buy-in from key stakeholders.

Goals for accounts payable can range from capturing early payment discounts to reducing processing costs. Others can include increasing data accuracy and automating repetitive tasks like manual data entry and document routing.

Start by auditing your existing accounts payable processes. How is your team currently processing invoices? What are some of the biggest challenges that they struggle with? What bottlenecks do they frequently encounter?

Collect feedback from the accounts payable team to help with this step. Then work with senior management to get them on board and fully committed. 

2. Identify Organizational Requirements

The next step is to identify the requirements that an AP automation solution must meet. This will help you choose a vendor that can meet your unique needs. 

For example, if one of your objectives is to streamline data entry and improve accuracy, then choosing software with advanced capture recognition is a must.

Examine your AP processes and identify any gaps. Then create a “functionality checklist” — a list of AP automation features that are separated into non-essentials, wants, and needs.

Here’s an example of a functionality checklist you can create:

AP Functionality Checklist

As you create your functionality checklist, be sure to get feedback from the rest of the accounts payable team. Then organize each feature into one of the three categories. This will help you determine which features you should prioritize as you search for AP automation solutions. 

3. Evaluate AP Automation Vendors

Now that you’ve established your accounts payable goals and determined your functionality requirements, you’ll want to turn your attention to evaluating AP software vendors.

However, choosing the right AP automation software can be challenging. There are countless options, each with its own unique set of features and capabilities.

Here are some factors to consider as you evaluate AP automation vendors: 

  • Features: AP automation software that you choose must meet your unique requirements. Look at the features in the “needs” column in your functionality checklist. If a vendor doesn’t offer that particular feature, consider choosing another option. You can also sign up for demos to test the software yourself if they’re available.
  • Usability: Finding a user-friendly automation platform is hard but necessary. If a piece of software has a steep learning curve, users are likely to feel intimidated. This can hurt adoption rates. Be sure to choose a solution with a simple and intuitive interface. It should also include drag-and-drop functionality and require no coding to get started.
  • Mobility: AP processes can be held up if a manager is out of the office and can’t access a workflow or approve an invoice from their mobile device. Choose AP software that offers built-in mobility. It should support devices like smartphones and tablets.
  • Integrations: Your company is likely using ERP software to manage its daily operations. Choosing an AP platform that seamlessly integrates with your existing systems is a must. This will improve productivity and ensure data accuracy across all platforms.
  • Security: Security is a must for obvious reasons. You don’t want unauthorized users outside the AP department to be able to start workflows and approve invoices. Make sure to choose a solution that offers robust security features like access controls.
  • Budget: There are AP automation solutions available to suit all budgets. However, keep in mind that more specialized software will generally cost more. Work with the finance department to establish a budget.

Choosing the right software that fits your requirements can be difficult. Consider assigning an AP automation project manager to help with the step. This person will be responsible for reaching out to potential vendors, signing up for product demos, and keeping suppliers in the loop.

4. Automate Your AP Processes in Phases

AP automation can be a complete game-changer in terms of making your processes more efficient. However, it can also introduce bigger problems if it’s not set up correctly.

Once you’ve selected an AP vendor, the next step is to gradually roll out changes. This will keep you from overwhelming your team with too much at once. It’ll also give you time to address any issues between phases. 

Start with just one objective that you want to achieve. 

For example, if one of your goals is to streamline approvals, one change you can start with is automating document routing. Build the workflow and test it with a small group of people. Then address any feedback you receive before you deploy it.

Take what you’ve learned and start planning the next phase. While it may seem slow to automate your processes in steps, it’ll help ensure a more successful implementation.

5. Integrate into Your ERP Systems

One of the more time-consuming (and error-prone) aspects of the accounts payable process is entering data from approved invoices into an ERP system. Employees waste time switching between different applications to enter the same information.

Overworked AP Department

Integrating AP software into your ERP systems eliminates the need for additional data entry and ensures that your records are always up-to-date. Once invoices are approved, the data is automatically entered into your ERP.

DocuPhase’s accounting automation solution offers seamless integration with industry-leading ERP providers like Acumatica, NetSuite, Salesforce, Sage, and more. 

AP Automation Best Practices

Making your AP processes as efficient as possible is key to paying invoices in a timely manner and strengthening ties with your vendors. 

Follow these best practices to get your AP automation efforts on the right track:

  • Get buy-in: Any efforts to automate your AP processes will fail to gain traction unless every member of the AP team is on board. Build a solid case and communicate the value of AP automation to increase buy-in.
  • Reduce data entry: Entering invoices by hand greatly increases the risk of mistakes. Even a small error like a typo can result in instances of underpayment or overpayment. Take steps to reduce and even eliminate data entry. Examples include using OCR technology to capture invoice data and leveraging automations to sync your systems.
  • Incorporate rule-based routing: Having a senior executive review and approve every invoice can delay approvals. With rule-based routing, you can make your workflows more efficient. For example, you can add a rule that only routes invoices above certain values to a senior executive.
    • Keep your suppliers in the loop: Some AP solutions offer a vendor portal that vendors can access to create invoices. While certainly convenient, it also means that your suppliers will need to update their own AP processes. Be sure to keep your vendors in the loop so they can prepare accordingly.
  • Document your processes: Implementing an AP automation solution means making changes to how you review and approve invoices. Make sure to document and include clear instructions with your processes. This will help accelerate staff training.
    • Maintain accurate records: The AP process doesn’t end when you pay an invoice. It also includes keeping records. Use document management software to securely store and organize your records. This will allow you to centralize your documents in one convenient location.
  • Continue to reiterate and improve: AP automation software typically includes real-time data that you can view in a dashboard. Be sure to keep an eye on this data to see what’s working and what’s not. Then use the insights you’ve gathered to continue improving your AP automation efforts. 

Making any changes to your AP processes can seem intimidating. However, the last thing you want is to choose a provider that doesn’t meet your business requirements.

Download our free AP Automation Software Evaluation Guide for tips on finding an AP vendor that can help you implement a fully automated end-to-end system.

Start Automating Your AP Process Today

AP automation enables you to effortlessly scale your processes. Even as you work with more vendors, your AP team will be able to effortlessly handle the increased workload and continue processing invoices in a timely manner.

With invoice process automation software like DocuPhase, you can automate your entire AP process. It features advanced OCR technology that digitally captures all invoice data and GL coding that automatically enters the data into your ERP system.

Plus, you can use the drag-and-drop process modeler to create an automated invoice approval process without writing a single line of code.

Learn how DocuPhase can help you automate your processes and free up your AP team from repetitive tasks like manual data entry. Our automation specialists are here to answer any of your questions.


A leader in Enterprise Automation software, DocuPhase delivers document management, workflow automation, and capture tools designed to help your enterprise stay organized and meet evolving technology and business needs.