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What is AP Automation? Basics of supplier invoice automation

February 25, 2022

Written by: Meredith Moran

What is AP automation? Accounts payable automation is the digitalization and automation of manual tasks in the supplier invoicing process.

Thinking about automating more of your internal finance processes? Supplier invoice automation could be the right place to begin. Here’s how AP Automation can benefit your company and a free guide to help you get started.

Upgrade your accounts payable process

With the digital transformation in full swing, businesses have become aware of the value and necessity of digitalized financial processes and automation. But what are we really talking about when we refer to AP Automation? Which benefits can you get by implementing automated processes within your own business?

AP Automation software for matching and approving invoices is fundamental for automating supplier invoice handling. However, it often does not help you reach the set goals of automation because the invoice data that enters it can be incorrect or incomplete. A robust AP Automation solution also includes automated ways of receiving, validating and importing supplier invoices.

Some of the options available are:

  • E-invoicing, which takes away the work of importing analogue invoices into your software. It also validates invoice content for accuracy and quick rectification.

  • Scanning or OCR solutions, which digitalizes documents but with less quality and higher costs or more work compared to e-invoicing
  • Digital archiving that only archives the invoice digitally and works outside of invoice processing.

All in all, AP Automation simply makes your working life easier and more efficient.

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What is AP Automation?

AP Automation is the digitalization and automation of manual tasks in the accounts payable process. Automation minimizes repetitive and tedious manual work to make time available for more revenue-driving tasks. Both manual and semi-manual AP processes can be fully automated, which saves time and increases control. Part of AP Automation is making the switch from paper and PDF invoices to e-invoices, which is a gateway to many of the benefits you’ll see below.

What are more benefits of AP Automation?

All in all, AP Automation simply makes your working life easier and more efficient. Here are more of the opportunities automation provides:

  • Eliminate manual work typically involved in invoice processing
  • Increase control and reduce risk by minimizing errors
  • Lower invoice processing costs
  • Achieve faster invoice processing and seize early payment discounts
  • Gain spend visibility with access to high-quality invoice data in real time
  • Improve relationships with your suppliers
  • Reduce your carbon footprint by incorporating sustainability throughout your organization

  • Gain competitive edge and evolve your business towards the future
  • Grow your business without adding more staff
  • Increase business agility and stay operational from anywhere
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AP Automation webinar

Watch our free on-demand webinar to see how to digitalize and automate your supplier invoice handling with Pagero.
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What to consider before automating supplier invoicing

Now knowing what AP Automation is and which benefits are available to you, the next step before diving in is to have a look at what your individual business needs are. Seriously consider these points as you investigate automated supplier invoicing management options:

  • What are the common reasons for errors or manual intervention today? Look at your wider purchase-to-pay process as it impacts invoice handling.

  • Where do you lack control today? Are there any gaps in your current processes?
  • Where are you doing business? Are you impacted by local e-invoicing regulations?

  • Where will your business be in five years? Find a solution that grows with you.
  • Consider your supplier base: what are their capabilities today and how can you bring them value?
  • How will you get all your suppliers on board your upgraded process? Is it something you can do yourself or do you need assistance?

A lot of this research can be done internally, but there are also great options for help figuring out the details. That’s where a consultation with a service provider can come in extremely handy.

Both manual and semi-manual AP processes can be fully automated.

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Questions to ask potential service providers

Many different providers offer AP Automation solutions, but they are not all created equal. Here are some essential questions to ask before selecting a service provider for your business:

  • How can I efficiently process my non-digital invoices?
  • What options are given to suppliers?
  • How are suppliers onboarded?
  • Does the solution support the full purchase-to-pay process?
  • Is the solution available in all my markets?
  • Does the solution comply with regulations in my country/countries?

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For potential future needs, you should also check if the service provider supports the full purchase-to-pay and order-to-cash processes, so that they also can offer solutions for AR automation, e-procurement and sales order automation.

If you’re ready to have this conversation, feel free to reach out to Pagero for a free consultation!

Summary of accounts payable automation

The accounts payable process is one often marred by human error because it traditionally involves hour after hour of tedious manual work. Accounts payable software can help streamline invoicing but is often not truly automated or easily integrated with multiple ERP systems. A cloud-based, integrated AP Automation solution is a sure way towards efficient accounting and invoice processing for businesses ready to move into the modern era.

This text was originally published 2 December 2020 and last updated 25 February 2022.

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