PiF Technologies

What is AP Automation

Managing outgoing expenses and vendor and supplier partnerships is not an easy task, and without an effective process in place, things can slip through the cracks.

Regardless of the size of your AP team, a smooth process can help your business thrive, while a disjointed one can leave your organization behind.

The way other organizations and the nature of business is moving, it’s no longer a question of if your organization will automate, it’s a question of when and how.

When left to answer these questions on your own, it’s difficult to come up with a solution that works for your needs and accounting team. We’ll share the definition of AP Automation, as well as how it’s implemented and key indicators that your business would benefit from it.

Defining AP Automation

The technical definition of Accounts Payable Automation (AP Automation) refers to technology used to streamline and automate accounts payable processes, removing manual tasks and providing better visibility and control over important financial data.

While some solutions are as simple as just a piece of software, AP Automation is a holistic process transformation through a set of connected tools that work as one unified solution to simplify your organization’s Accounts Payable processes.

These tools can include:

Document management
Document Management allows you to scan, file, and access your documents from one central system. It creates a fully paperless office and files can be accessed from anywhere, at any time, from any device.

Optical Character Recognition
Optical Character Recognition (OCR) takes data that is traditionally manually keyed-in, sorted, and matched to the purchase order and automatically classifies and sorts it.

Integration with your ERP
You likely already have an ERP that your organization relies on, so by implementing a solution that works WITH your ERP rather than separate from it, you create an even more streamlined process.

Building workflows can help you find the gaps within your process that need fixing, and allow you to fix them quickly without missing a beat.

Using manual methods, the average invoice takes two weeks to process and requires approval from two to five people before it is fully processed. If your organization is processing hundreds of invoices monthly, relying on manual payment processing is simply inefficient. In a study on AP automation by the Ardent Group, best in class companies process invoices in less than 4 days while others can take over 13 days to process them.

By implementing AP Automation, your organization can decrease in invoice processing costs from $38.77 per invoice to $3.09 per invoice and reduces process time from 20.8 days to 3.8 days. It also helps you capture more early payment discounts and avoid late payment penalties and interest accrued from lenthy invoice processing times. These cost reductions will allow your organization to reallocate funds to other initiatives that can grow your organization, and by saving time your accounting team can focus on more valuable tasks.

AP Automation also promotes visibility of cash flow and liabilities. By gaining a better understand of where your organization stands financially, you can plan and budget better and create a healthier business.


How do I know if I should implement AP Automation?

Every organization is different in terms of need, ability, and timeline and budget to automate their current processes. Having executed hundreds of AP Automation projects, we’ve noticed patterns among our most successful deployments. If the following problems apply to your organization, you’re a perfect candidate for AP automation:

  • Process 500 or more invoices per month.
  • More than 2 full-time AP clerks
  • You are outsourcing your AP
  • Too many late payment penalties
  • Missing early payment discounts
  • Invoices processed in more than one location.
  • Manual data entry errors
  • Misplaced invoices and other documents take up to much time
  • There is lack of visibility of cash flow

More often than not, some organizations that need a solution the most don’t realize it. Their current state of managing their processes is “good enough” so they’re resistant to change.

Why implement AP Automation

  • Reduce time required to process invoices
  • Eliminate the manual processes associated with routing, approving, and GL coding invoices
  • Process invoices faster and more accurately reducing payment errors
  • Reduced paper and improved operational efficiency
  • Better data visibility
  • Means real-time access across your organization
  • Streamline vendor invoice processing and manage discounts to improve cash flow
  • Ensure record retention compliance and keep documents safe and secure
  • Say goodbye to filing cabinets
  • Saves headaches come audit time – have peace of mind that you will find documents you need

How to implement it

As previously mentioned, AP Automation isn’t software you can simply download and install. There are many moving parts to an effective system, but by working with a partner than can design a solution that fits your exact needs, moving to a fully automated process becomes so much simpler.

PiF Technologies has been implementing smart automation solutions for over 20 years, and we constantly evolve to offer innovative solutions to transform our clients’ business processes. We’d love to discuss your current needs with you and help you find a solution that works.

Learn more, check out our other posts!

AP Automation

The Future of Accounting Automation

While the role of accounting hasn’t changed in decades, the technology available to finance teams has. Rather than stay stuck in the past, organizational leaders have a massive incentive to invest in technologies such as Artificial Intelligence and Machine Learning to help their teams evolve.

Read More »
AP Automation

Meet the AP Automation of the future

Meet the AP Automation of the future. Manually processing invoices is so 1999. Intelligent Document Processing – Powered by Artificial Intelligence Process invoices like never before Automated Document Extraction allows you to index faster using the power of AI and

Read More »
Document Management

How to use Custom Columns to create saved searches in DocStar

Streamlining document management is crucial for your organization, and DocStar offers an efficient solution for storing and retrieving documents seamlessly. While using DocStar, certain tasks may not be part of your daily routine but are essential on occasion. Whether you’re

Read More »

Distribution: “How can I get started with AI?”

Distributors are at an inflection point and are primed to invest in Artificial Intelligence and other technologies to simplify their operations. Understand the value of automation for distributors as well as ideal use cases for a solution.

Read More »
Document Management

How to add pages to a document in DocStar

Efficient document handling is important to your organization and by utilizing document management with DocStar, you have the ability to simply store and retrieve any document you need. When working within DocStar – there are certain activities that you may

Read More »

Download "Work Smarter, Not Harder: Understand the Value of RPA" now!

Let's Connect

Have questions? We'd be happy to answer them.

Thanks for downloading!

Click the button below to view your download. You will receive your download link by email as well.