As businesses adapt to the accelerating pace of technological change and new e-invoicing mandates, one aspect of financial management stands out – accounts payable (AP) automation.
Crucial for organisations worldwide, this transformation rewrites the rules and offers a seamless alternative to tedious data entry, high processing costs, and lost invoices, promising a new era of financial agility.
What is AP automation?
Accounts payable (AP) automation is a method that utilises specialised invoice management software to minimise human input for repetitive and routine tasks associated with the accounts payable process, including the capture, approval, and processing of invoices.
AP automation solutions available on the market typically include:
- Optical character recognition (OCR)
- e-invoicing
- Electronic archive
- Multi-ERP integration
Businesses of various sizes and industries adopt accounts payable automation to enhance their financial operations, with software as a service (SaaS) being the most common deployment model, although alternative models are also available.
Seven benefits of AP automation
- Minimised human errors: AP tools automate data entry and reduce costly mistakes inherent in manual processes
- Reduced costs: Automation significantly lowers the time and cost required for tasks, allowing workers to focus on less repetitive work.
- Improved data visibility: AP automation provides complete and real-time data input, enabling the creation of data-rich reports for improved company performance analysis.
- Easier monitoring: Automated systems maintain an audit trail for all transactions, facilitating process monitoring and compliance with audits.
- Customised workflows: AP automation allows for the customisation of the accounts payable process to suit specific business needs.
- Improved partner relationships: Automatic recording of payment information ensures on-time payments, enhancing the company’s reputation as a preferred partners.
- The chance to grow: AP automation enables businesses to focus on core competencies while monitoring and improving processes, paving the way for further automation in the future.
Current trends in AP automation
The current AP automation market is dynamic. According to Gartner’s Market Guide for Accounts Payable Invoice Automation Solutions from 2023, hyperautomation technologies are elevating touchless rates at each stage within the AP process. The changes are also accelerated by the continuous push by many governments to further digitisation.
Gartner predicts that the expenditure in the AP automation and supplier e-invoicing software sectors is expected to reach almost $1.75billion by 2026, experiencing a compound annual growth rate (CAGR) of 14 per cent, compared to the approximately $925million recorded in 2021.
As AI and ML play an increasing role in automation, certain capabilities are becoming more common in AP automation solutions.
- Natural language processing (NLP) capture: NLP solutions offer significantly higher success rates than traditional OCR-based digitisation and require less training.
- AI-enhanced OCR capture: Artificial Intelligence can correct common image issues.
- Duplicate and fraudulent invoice detection: AI engines can identify potential duplicate invoices or invoices with unusual amounts and flag them for review.
- Smart workflows: AI can learn how to handle invoices with errors, reducing the need for manual review.
- Supplier identification: Occasionally, suppliers are duplicated in the company’s master data source. AI engines learn to precisely identify the correct supplier.
3 steps for choosing the right AP automation solution
Nowadays, it’s more challenging for buyers to find the most appropriate solution out of the large number of available options. Selecting the best AP automation solution might be a problem due to the growing variety of ERP and financial systems in use, countries of operation, and policy requirements.
- Define your requirements
As with any IT solution, analyse your business needs and prioritise the solutions that address them. This involves considering the size of your organisation and the volume of processed invoices. Consider developing a composable strategy, allowing for specialist solutions that address specific regional problems. - Confirm e-invoicing compliance
Legal compliance is essential as more countries move towards a clearance model. In terms of e-invoicing, there are complex rules and procedures that govern business activities. These policies can be location-specific, further complicating compliance adherence. Ensure that the selected software can support current and future compliance standards and provide your company with a scalable solution. - Research the AP automation solution vendor’s area of expertise
Many vendors are not solely focused on accounts payable automation, as they offer multiple IT systems or applications with AP automation as a sort of ‘add-on’. Consider the difference between the provider’s core focus (whether it’s banking, procurement, or electronic data interchange) and the provided AP automation.
AP automation solution – Comarch e-Invoicing
In its Market Guide, Gartner mentions a list of AP automation software providers. In 2023, Comarch e-Invoicing made Gartner’s list as one of the representative vendors headquartered in Europe.
Comarch e-Invoicing was created with automatisation in mind. Regardless of your company’s size and industry, our solution can automatically validate every invoice you receive while ensuring legal compliance in over 60 countries. Touchless invoice processing, supported by advanced AI functionalities and state-of-the-art OCR technology, can revolutionise your invoice workflow.
Automate and save today
The demands for e-invoicing compliance adaptation are increasing globally. Accounts payable automation can be a beacon of financial and operational efficiency. Specialised AP software and advanced technologies are rewriting the rules, offering organisations a seamless alternative to laborious data entry, high processing costs, and the risk of lost invoices.
