What Are the Advantages of AP Automation for Businesses?  

Automating accounts payable has obvious benefits, but switching entirely away from paper to digital processes can come up with a fair set of questions. For businesses to embrace the change, they need to know that the gulf between automation and “the way things have always been done” are wide enough to justify the time and expense. 

That case has never been easier to make. Technology, shifting business expectations and global financial markets, and outside threats have conspired to make automation a virtual necessity. Per Ardent Partners, nearly 50% of invoices and nearly 32% of payments are still processed manually, underlining that there are plenty of organizations who still have not embraced automation.  

We explain what AP automation is and what to look for in a solution elsewhere in our Learning Center. This article will focus on why accounts payable automation is critically important, and the tangible advantages of automation versus manual processes and payments. Read on to learn: 

• Why manual processes are so costly 

• What advantages AP automation offers businesses 

• Why adoption is important now and how to get started 

The Cost of Manual Processes 

Today, manual invoice and payment processing are no longer tenable, especially if it’s your sole strategy. Businesses relying on paper and many hours from employees are dealing with a host of troubles that only increase each year. These problems can include: 

• Higher labor costs: Manual data entry, manually routed invoice and payments approvals, and checks that need to be handled and mailed mean many hours for employees who might be racking up overtime and could be spending that time more wisely.  

• Greater error risk: Human error in coding invoices or entering payment details can lead to duplicate payments, missed discounts, and strained vendor relationships. 

• Fraud exposure: Antiquated processes make it easier for bad actors to exploit any cracks in an organization’s armor, especially with checks that are increasingly stolen or re-routed.  

• Slow payments and frustrated vendors: Manual approvals and mailing checks can stretch timelines from days to weeks, impacting cash flow and frustrating vendors you rely on for goods and services.  

These inefficiencies incur costs ranging from lost money to squandered time to increased fraud exposure. Those are unacceptable for organizations trying to be lean, nimble, and secure, which likely includes your own organization. Organizations utilizing AP automation reduce those costs and exposure to risk, with best-in-class businesses who embrace technology realizing invoice and payment processing cost reductions of up to 80%.  

The advantages of automating AP are quickly realized, straightforward, and easy to justify to the larger business.  

The Advantages of AP Automation 

Real Cost Savings 

Chances are that your Chief Financial Officer (CFO) is not asking you to control costs; he or she is telling you to. Automation eliminates manual tasks like invoice matching, payment approvals, and check mailing. This in turn cuts labor costs and frees up AP staff to focus on higher-value work that earns the business money.  

Automated workflows also cut costs by reducing paper, postage, and storage costs, avoiding late fees, and potentially capturing early payment discounts and cash-back rebates. Premium ACH and virtual card payments, payment types offered through payments solutions such as Bottomline’s Paymode network, offer a particularly effective way to generate revenue that offsets costs, including those involved in implementing a solution.  

Faster Processing and Greater Efficiency 

Ardent Partners found that best-in-class organizations who have fully embraced automation see a 60-80% reduction in payment and invoicing processing times. That’s not a surprise given how automation trims manual steps.  

Take invoices. Automated solutions route them for approval based on existing rules, allowing for instant review instead of a clerk needing to walk each invoice over to a manager’s desk for sign off.  

Payments can work just as seamlessly. Solutions that enable payments to be settled in 1-2 business days without manual intervention, rather than requiring vendors to wait days or even weeks to receive payments, also allow for roll-ups of invoice and payment status delivered automatically so fires can be put out before they start.  

In both cases, tasks that would have required additional, unnecessary work and waiting around are removed, ensuring payments and invoices move faster and processes are more efficient.  

Enhanced Security and Fraud Prevention 

Check fraud accounted for nearly 30% of payment fraud incidents in 2024, with losses exceeding $1 billion. Without the help of automation, safeguarding payments by hand has become a nearly impossible task.  

Issuing ACH or virtual card payments through secure payment rails, like those used in the Paymode network, makes it harder for fraudsters to creep in. Encrypted and tokenized data protects critical payment data in the case of account takeovers and successful phishing scams, while audit trails make it easy to spot suspicious behavior. Ideally, every transaction is protected by a thicket of protections. These might  include geofencing to prevent unauthorized logins, multi-factor authentication to stump fraudsters, and validation for every business making and receiving payments.  

Solutions like Bottomline’s Paymode network are constantly vetting participants and monitoring transactions for anomalies, reducing risk for both payers and vendors.  

Rich Remittance Data and Easier Reconciliation 

Getting suppliers to accept secure, efficient digital payments can take some work. These businesses often want to stick with checks because they’re familiar and don’t carry fees. However, the outsized inefficiency and fraud risk associated with those checks prove to be much more costly eventually. 

The number one way to entice suppliers to abandon manual methods and embrace automation for your business and theirs? Easier, faster reconciliation. Manual matching of checks to invoices proves to be time-consuming and error prone. Automated payments, meanwhile, can be tailored to include structured remittance data that enables automated matching. That translates to fewer errors compared to eye-straining manual means, and more accurate data for audits and financial planning. 

The use of formats like Corporate Trade Exchange (CTX), for example, allows one payment to cover and easily reconcile with multiple invoices. Data can easily be routed to a supplier’s ERP or other system of record for even more seamless reconciliation, greatly improving efficiency and cutting down on time and errors. 

That value for vendors has another major benefit, as well.  

Improved Vendor Relationships 

Processing invoices by hand, sending checks, and going back-and-forth with vendors who want to know where their payments are can stress or fracture critical business relationships. Automation, on the other hand, can strengthen them. 

How? Paying vendors on time, every time while offering preferred payment methods, detailed remittance, improved security, and streamlined communication with your accounts payable team fosters trust and collaboration. A full 66% of businesses have improved their time to cash cycles in the past year thanks to accounts receivable enhancements made possible by those benefits. In turn, that can lead to fewer unnecessary communications, delays and problems, and even better payment terms over time. The 97% of businesses tracking cash flow with Excel could use the break.  

Scalability and Strategic Value 

AP automation is about efficiency, but it’s also about enabling growth. Systems that require less manual intervention and fewer steps allow businesses to scale more easily without requiring additional staff members to handle core processes.  

The data collection and reporting that automation solutions enable also allow businesses to identify bottlenecks in existing workflows, easily track spend across a rich variety of categories, and forecast cash needs based on real-time information. Businesses only how that fuels growth and allows teams to scale when they have the data and efficiency in front of them.  

Why Adopt AP Automation Now?  

Economic uncertainty, rising costs, and increasing fraud threats make AP automation more than something to put on your list of future priorities. It’s a competitive necessity for businesses who don’t want inefficiency, security risks, and errors to drag them down. Organizations that delay adoption risk higher operational costs, increased fraud exposure, and difficulty in attracting and keeping talent; 60% of new AP hires say having automation is a key factor in choosing an employer.  

Conversely, those that embrace automation gain resilience, agility, and scalability that their peers operating more manually cannot even dream of. It’s a question of staying ahead of trends in accounts payable and challenges on the global stage, as opposed to falling well behind on both.  

What It Takes to Get Started 

Implementing AP automation to realize the advantages listed above is simpler than it may seem, but the work begins well before you contact a partner. Follow these simple steps to get alignment from your organization and select the right solution for your business.  

1. Assess your current processes: Identify pain points and inefficiencies, priorities and wish list items, and a rough budget.  

2. Set clear goals: Look at the list of advantages above and rank them and then add any ancillary goals or important Key Performance Indicators (KPIs) that you might need.  

3. Choose the right partner: Look for solutions that integrate with your ERP, offer secure payment options, handle both invoice and payment automation, and provide robust reporting. Dig into references, collateral, and ask pointed questions to ensure potential partners can offer what you need.  

4. Engage stakeholders: Involve finance, IT, and procurement early to ensure buy-in, and bring executive stakeholders on board once you’ve secured widespread approval. The last thing you want is to decide on a solution and have it shot down! 

AP automation offers clear advantages over manual processes, benefits that range from greater efficiency to tighter security, and businesses increasingly understand they can’t live without those advantages. Reducing costs, accelerating payments and invoice processing, enhancing security, and improving your relationships with key vendors has the potential to transform accounts payable. That in turn means going from a cost center to a department the rest of the business will want to emulate. 

The question, ultimately, isn’t whether AP automation is better than the status quo. The question is just how many advantages can be realized by making the switch, and with each passing year, that list gets a little longer and the answer becomes a little more compelling. 

Learn more about AP Automation’s benefits