What Is Payables Automation and Why Is It Critical for Businesses?

Check payments date back to ancient times and have been in continuous use for over a thousand years. That is remarkable staying power for any technology, but in an era where payables automation has become critically important, the long reign of the check is ending.

Payables automation is the way of the present and the future. Whether you turn to a partner to automate, use artificial intelligence (AI) to help with analytics, and enroll vendors in ACH or card, this is less of a new era dawning than one reaching noon. Faster, more efficient, and more secure payments are the only way companies can give suppliers what they need, keep costs down, and pivot quickly as new payment challenges and technologies arise.

Here, we’ll break down:

• What payables automation is and why it’s important
• Why it’s a critical tool for finance teams the world over
• What to look for in a payables automation partner

What Is Payables Automation?

Payables automation refers to the use of technology to streamline and digitize everything from payment execution to fraud prevention. Instead of relying on manual tasks like data entry, paper checks, and physical approvals, payables automation enables businesses to manage payments electronically, with greater speed, accuracy, and control as a result.

Modern payables automation platforms integrate with enterprise resource planning (ERP) systems and accounting software to create a seamless workflow. They support multiple payment types, including ACH, virtual card, and remaining checks, and allow for streamlined processing, improved visibility, and reduced risk of fraud. With the right level of automation, both ACH and card payments can be issued automatically to vendors in minutes instead of hours. When that automation is paired with a secure B2B payments network,  both payments and supplier data can be secured against ever-growing outside threats.

For vendors, receiving these payments means getting cash much faster than they ever could with a check. In many cases, these vendor businesses can also receive enhanced remittance data to make reconciliation and cash application faster and easier. These benefits encourage enrollment and support vendors transitioning to more secure, more efficient forms of payment.

These efficiencies are accomplished through AP automation technologies, which include intelligent payment optimization that chooses the best payment type based on supplier preferences and cost efficiencies. Payments typically can be easily batched for approval, especially if you’re using a payment network, where a provider can process payments without multiple manual steps that require human intervention. This in turn simplifies every step of your payables process.

You can read our articles about B2B payments networks for more in-depth information on why these networks and payables automation are the chocolate and peanut butter of business payments.

Why Is Payables Automation Critical?

Payables automation provides businesses with a host of benefits. Here are just a few of them:

1. Efficiency and Cost Savings

Manual AP processes are time-consuming and error-prone, and automation reduces the need for paper handling, manual data entry, and physical approvals. That can lead to trimming payments processing costs by up to 80% with some solutions like Bottomline.   This frees up finance teams to focus on strategic tasks rather than administrative ones.

One hurdle you may have to overcomes with AP teams is that automation and AI will replace staff. But, it can help to reinforce that teams will gain additional bandwidth to focus on strategic initiatives while automation replaces the more cumbersome and tedious parts of their job. Real efficiency is best realized with automation and expertise working side-by-side, and once implemented, saves both time and money.

2. Fraud Prevention and Security

Paper checks are vulnerable to fraud, theft, and forgery, with thieves becoming adept at swiping checks out of mailboxes and rolling out schemes that allow them to easily steal money meant for suppliers. Unsecured digital payment systems can be just as susceptible, with phishing scams helping fraudsters uncover passwords, access accounts, and drain funds.

Automated payables systems, particularly those using secure networks, offer enhanced security features such as encryption, supplier validation, multi-factor authentication for account access, role-based access, and audit trails. Removing checks from the equation and substituting digital payments that are processed automatically and safely greatly reduces the risk of fraud. Given that the average fraud loss is in the tens of thousands of dollars, that’s no small peace of mind.

3. Improved Supplier Relationships

Timely and accurate payments foster trust and reliability with the vendors you rely on. Automation ensures invoices are processed quickly and helps ensure payments are made on time, leading to fewer angry phone calls and less staff time spent sorting out payment issues.  The best solutions will also enroll your suppliers in digital payments for you, making the shift easy and seamless for your AP team.

Or as American Express found in a 2025 report, 95% of businesses say easy, streamlined, and secure payments are key to satisfied customers. If you want positive relationships with your suppliers, it’s best to make receiving and applying their payments as simple as possible. Payables automation allows for that.

4. Real-Time Visibility and Control

With automation, finance leaders gain real-time insights into outstanding liabilities, payment statuses, and cash flow. Dashboards and analytics tools available in any automation solution worth its salt will help monitor KPIs, optimize working capital, and support better decision-making.

This visibility also allows you to spot potential problems, such as suppliers consistently receiving overdue payments or suspiciously large payment requests, before they become more costly issues.

5. Scalability

As businesses grow, manual payments become increasingly untenable. Even the most well-staffed AP team needs to spend less time fielding supplier calls, routing check payments for approval, and stuffing checks into envelopes and mailing them.

Automation scales with transaction volume and helps ensure compliance with internal policies and external regulations, including tax and audit requirements, without the many hours and countless headaches that come with doing that work by hand.  

What to Look for in a Payables Automation Solution

Differentiators. Automation is almost invariably better than no automation at all, and the basics are very much the same across payables automation partners. What you want to know is where the solution you’re acquiring stands out.

Look at the items above, ranking them according to your business needs, and ask pointed questions of a potential provider, such as:

• How quickly can you move me away from check payments?
• How do you protect my business, my payments, and my vendors?
• What sort of reporting do you offer?

If you’re satisfied with the answers, you can dive into other key payables automation factors that are often overlooked. Ask what the rebate potential is, which will tell you how much money you can expect to get back from your supplier payments. Find out how robust the support is, and whether you can expect your partner to enroll suppliers on your behalf and deal with any questions that arise during that process. Learn how quick the implementation is, and whether there are a host of tiny charges associated with that implementation, given that some providers will sneak in unnecessary fees.

If you’re satisfied with the answers and you think you’ve found the provider most likely to save you time, cut your costs, secure your payments, and prioritize your supplier happiness, congratulations! You’re about to reap the benefits of payables automation, with all the efficiency and security that big move represents.

Learn more about Payables Automation with Bottomline