For Who?

For any CEO, CFO, AP Clerk, AP Manager, Digital Transformation Manager or anyone looking to improve their accounts payable function and processes.


Maybe 10 years ago, accounts payable process improvement was near the bottom of any CFO or CEO list as it did not drive direct revenue and the activities surrounding it, although vital, were dull and time-consuming.

Now in 2020, new technologies such as AI, blockchain, robotic processes, and new methods have shaped a much more complex set of possibilities, offering great returns on investment, yet making the choice for the next solution more challenging.

– Which systems for which ERP?

– Is my accounts payable optimised?

– Which processes should I automate?

– What are the best practices? What are the traps?

– Cloud-based or On-premise?

– The Big Players or the New Players?

– Which OCR?

– Which workflow? Within my ERP or external to my ERP?

Most companies find it difficult to assess their own situation which results in the incapacity to create what we call a strong and valuable “gap analysis” in order to understand what they really need.

The Current Situation





In 2019, 60% of small-business owners felt they were not very knowledgeable about accounting and finance function and only 59% of companies (all sizes included) received their invoice electronically.

Not even 10 years ago, many companies downplayed the significance of AP because it did not generate direct revenue. Executives would often rather put their time, effort, and energy into their core business processes. This was a short-sighted view as AP doesn’t go away and any existing problems are compounded over time, which ultimately turns into an important cash flow discrepancy.

However, in 2020, 50% of C-level executives in finance function expect that the development of intelligent, automated accounting processes and systems will have the highest impact over the next 30 years.


Why that change?

New methods, new tools, new players.

That being said, finance departments are still far behind when it comes to new technologies’ adoption in comparison to other departments such as Sales or Marketing. Regrettably, reporting and technical accounting teams seem to be the black sheep when it comes to using new technology according to KPMG’s new report on accounts payable automation.

It might sound strange as the finance function is at the core of any company but in reality, this has always been the case. Not solely for the financial department but for the entire financial industry. A good example is how digital banking is now threatening the long, but soon to be overthrown, hegemonic reign of traditional banking institutions.

Why is that? Well, unfortunately, these institutions relied too much on notoriety when it came to choosing new solutions and partners instead of looking for disruptive innovation. With AI, blockchain, machine learning, workflow and new organisation methods, the way to improve your accounts payable and, to a greater extent, to digitally transform an entire finance department and complement your ERP department is endless, but it requires some changes and a good amount of knowledge to choose the right solution suitable for your need.

I. Useful Stats For Finance Executives

To start with, here are some stats that will provide some perspective to the different performances Accounts Payable department can achieve, depending on the solution they chose:

Some companies take more than 15 steps to process an invoice due to poor business rules and chaotic processes.

Non-profit/Education are the industries with the higher costs to process invoices and government close behind with a cost of $16.78 and $15.88 respectively. The best-in-class are the wholesale and retail industry with a cost of $3.57.

The average number of invoices processed per month for a company that uses manual processing is 906, processing 5 invoices per hour.

The average number of invoices processed per month for a company that uses OCR is 3,821, processing 22 invoices an hour.

The average number of invoices processed per month for a company that uses OCR coupled with automated processing is 10,387, processing 60 invoices per hour.

Only 32% of companies using OCR technology have a straight-through process, meaning that 68% of invoices processed with OCR still require manual effort by accounts payable.

Organizations that mostly use electronic invoicing (more than 50%), are processing 437 more invoices per employee every day than companies whose processes still rely mostly on paper (more than 50%). In fact, straight e-invoicing departments process 370 more invoices per clerk per day than straight OCR departments.


Last but not least, the right AP automation solution can provide ROIs in less than 8 months.

II. Take a Strategic Approach to Accounts Payable

Before changing solution, investing in an OCR or an automated accounts payable solution, you should optimise your accounts payable functions. In case you first want to be more familiar with Accounts Payable, you can read our AP processes article and then come back to this guide.

According to Deloitte working capital series, there are 6 main activities that, if improved, can help you free up cash and strengthen your working Capital.

I. Vendor Selection Process





One of the initial steps to set up a robust accounts payable framework involves setting up a preferred supplier list so that you position your organisation to negotiate the most favorable buying terms. Here are some advice to negotiate terms designed to optimise your working capital:

– Set vendor negotiating goals and ensure the participation of key staff and decision-makers (e.g. Chief Financial Officer and Chief Procurement Officer).

Create supplier performance scorecards for strategic vendors and use these scorecards as a way of motivating suppliers to increase product or service quality, levels of customer service and/or price.

– Seek incentives periodically also to negotiate better prices. Strategies could include asking vendors to match their competitors lower prices or negotiating volume discounts.

II. Supplier Master Data Set-Up Process





Make sure you both agreed on the term to use in the supplier master data and more importantly, properly enter this data so that you don’t encounter future payment errors which will prevent you from taking advantage of available discounts. Some good practice:

– Make sure that service Level Agreements (SLAs) are accurately reflected in your purchasing and payable systems. Supplier master data should include product/service details, quality standards, delivery times, supplier obligations and any provisions for regulatory compliance that apply.

– Update payment terms, volume discounts, trade credits or periodic rebates. In case the contractual terms change or are renegotiated, the supplier master data must also be changed to avoid future errors.

III. Contractual Review Process




According to SAP Concur’s Research, typical small/midsized businesses process 450 invoices per month with a 1.29% duplication rate, resulting in about 6 duplicate payments a month. Take your average amount for your invoices, multiply this by 6 and find that what you are possibly losing per month. According to this same research, we are looking at about $12,000 a month.

To prevent such losses, it is important to regularly review vendor contracts:

– Assign this responsibility to a specific team that will check the accuracy and compliance of the vendor practice with the agreed terms.

– Include in your contracts a clause that passes accountability for fines and penalties to vendors that are found to be underperforming in some respect.

IV. Procurement Process

 Procurement processes are a series of processes that are essential for getting products or services from requisition to purchase order and invoice approval. Regardless of each business’s uniqueness, every procurement management process consists of 3 Ps’, namely Process, People, and Paperwork. Each step is detrimental and when a company fails to streamline the process, short-term liquidity needs are more difficult to anticipate.

In order to avoid such casualties, set clear accounts payable metrics such as the frequency of invoices that match POs, the percentage of invoices paid to time and percentage of negotiated discounts captured, and adhere to them across the organisation.

Read more about the traps to avoid and the best practices.

V. Invoicing Process

Properly managing the invoicing process requires to use of new technology and stop relying on manual practices. However, no matter what stage you are at, some strategies could improve your liquidity:

– Refuse to pay inaccurate invoices. Not only when it comes to amounts but also with addresses or quantities so that your supplier act with more due diligence.

– Process invoices on a timely basis. Even our notification feature won’t make you process theses invoices if you are not willing to push the button.

– Reduce the steps involved in the process, less is more in this case.

VI. Accounting and Reporting Process

Managing payables without a reliable accounting reporting function is like running in the dark. Without this data, many businesses lack visibility into how much, how often and when they pay their suppliers. This can prevent you from choosing the most advantageous payment terms or selecting appropriate timing in which to pay vendors. To avoid such a situation:

-Improve real-time reporting capabilities by automating reconciliations and ensuring they remain current.

Follow-up on and resolve unreconciled items on a timely basis.

-Set-up business rules and user authority so that the same individuals prepare and review all reconciliations to reduce the likelihood of overpayment or duplicate payments.

– Properly track all payments made, not just vendor payments.


A good starting point to improve your accounts payable is to promote development across your different accounts payable processes:

– Select your vendor carefully and negotiate better prices periodically.

– Create efficient and accurate Supplier Master Data

– Monitor your payments and your vendors’ practices to avoid duplicates.

– Set accounts payable metrics to anticipate short-term liquidity needs.

– Reduce the steps in the invoicing process and monitor it on a daily basis.

– Set up efficient reporting processes to have a clear understanding of your pain points.

III. Assess the Current Situation

Top performers match their purchase orders with their invoices 90% of the time by combining expertise with automation, making the experience almost touchless. AT WHAT STAGE ARE YOU? That is a question you should ask yourself once you have done everything you could do to optimise your accounts payable. At that time, if your cost per invoice processing is still high, around $8 and more, or if the process takes too many steps, then you need to automate, and the greatest question is HOW?


Most of our clients have encountered difficulties to assess their own AP automation requirements. Needs such as being able to automatically extract information from invoices are common but it becomes a bit trickier when it comes to streamlining processes, attribute roles and permissions and set up business rules. On top of that, you need to make sure that the solution integrates with your ERP functions. You also must figure out if you want it on-premise or cloud-based. And once you have made your choice, you will need to plan the implementation with the rest of your team, train your staff etc….


Now, we have created this AP Automation Business Case for you already but we will sum it up here to give you a good overview of how to start with it.

First thing, ask yourself the right questions. Most of our clients come with these ones in mind when they first approach us:

– Can I integrate this new solution with my existing set-up?

– Am I looking for a cloud-based AP automation solution or an on-premise solution?

– Do I need to create complex workflows or is that not necessary?

– Is this solution user-friendly or does it require extensive training?

– Can this solution extract information from different document types?

– Can I achieve a 90% plus a reduction in doc prep and handling?

– Can I achieve a 90% plus reduction in keys stokes and data entry errors?

– Do I need a 2-way duplicate supplier Invoice check?

– How can I maintain and access a complete audit history on any and all actions performed during the invoice life-cycle – who, how, when and why?

– Should I have the ability to show the status of every invoice inflight, even once it’s been paid within the ERP?

– How important is it to allow for an automatic lookup to the ABR website to retrieve entity details based on the extracted ABN from the invoice and perform tax algorithm checks for compliance?

– How important is it to auto-match Govt. ABR details against master vendor file with the ERP and identify those charging GST when they should not be and check entity details against our ERP?

– Can I automatically check BSB and Acc Details off the invoice against the master data within the ERP as part of a compliance process?

– Do I need the ability to add supporting documentation, collaborate and add notes at any point during the invoice life-cycle?

– Do I need auto-escalation on invoices based on financial delegation limits not being met?

– Do I require broad-based exception management and invoice tracking functionality enabling on time, every time payments?

– What if people go on leave, do I require the ability to auto-assign tasks to another User?

– Do I need deeper search capability and be able to link images to transactions in my ERP?

Of course, each business is unique and therefore has different requirements, however, make sure your next solution includes core features that will allow you to ease your workload and scale-up if necessary, such as:

– A powerful OCR for exact extraction data (we have one the best OCR on the market for instance – ABBYY OCR)

– A document library to monitor your invoices

– A flexible and configurable business rules capability

– A user-friendly workflow and invoice life-cycle management

– Make sure the solution integrates with your ERP. You can see our Integration List here.

Bear in mind that AP automation is all about return on investment so make sure you are able to evaluate your current expenses, the solution costs and to forecast the benefits. Currently, the best solutions, including ours, guarantee a return on investment during the 1st year.

You can read more about the traps to avoid in our Business Case Guide.

Those are just a few so take the time to talk with your team and write down all the questions that come to mind. When all your questions are set on the table, you will have a better understanding of your current situation. You can then start preparing the plan of action.

IV. Choose Your AP automation Solution

Step I. Determine Your Scope





The project scope should be based on your organisation’s needs and challenges. Seek to find your pain points, discuss with all the staff involved, understand the current relationships with your suppliers, and check the numbers. We will explain in more detail the accounts payable processes that can be automated later in the guide but make sure you determine yourself which processes you need to automate. Some companies’ pain point is related to fraud detection when others have already a transparent solution but have a lack of flexible business rules which extend the different steps required to process an invoice.

Examples of specific and measurable project goals include:

  • Reduce invoice processing lead time by X%
  • Achieve Y% fully automated touchless processing of PO-based invoices
  • Reduce hard costs generated by late vendor payments by Z

Step II. Outline your Current AP Process





Define your problematic sections here. Start by identifying the proportion of PO vs. Non-PO invoices in your organisation. Understand how each of these workflows run and how many steps each takes. You might have POs more automated than Non-PO so you will need to think about how to either have less Non-PO invoices or to smooth the process to match your PO costs and time. Either way, both PO and Non-PO workflows come with challenges which you need to list so that you can streamline both processes via the accounts payable automation solution.

Step III. Understand your ERP Limitations





The Enterprise Resource Planning (ERP) system is a prime consideration when adopting a new AP automation solution. The key is to make sure that your next solution bridges the gap between how you receive your invoices and how they are paid from your ERP systems. Many ERPs are designed, for the most part, as a General Ledger (GL) and as such, lack much of the functionality to allow high-efficiency dividends and lower costs for invoice processing. Hence, the key is to identify your ERP limitations and other systems involved in your accounts payable ledgers and seek a solution that fills the gap, matches your needs and complements your current set up.

Step IV. On-Premise or Cloud-Based





If we had to give one answer: Cloud-based.

A standard cloud service means you can have access to the full functionality in relation to your business needs and current processes in a smooth and speedy deployment project. IT resources are replaced by business admins that are responsible for ongoing configuration updates and establishing new business rules and/or user permission levels. Moreover, solution updates are available automatically and regularly so no need for extra expenses on external consultants when upgrades are released.

Of course, some companies opt for on-premise for compliance reasons but it comes at a higher cost as hosting the solution on your own servers require IT resources and more external consultant time.

Step V. Compare Solutions





Once you have a clear understanding of your business needs and systems, you can start researching your next solution. There are plenty of solutions out there, some are good and others not. We know for a fact that some well-branded companies offer poor solutions when less fancy websites and companies provide a reliable and strong AP automation system. Therefore, make sure you do your homework before choosing a solution.

You can use the set of questions written above to start with and add your specific characteristics to it. Participate in webinars, ask for personal demos. In other words, take your time as AP automation is not a one-day implementation and we have seen companies losing a lot of money because of choosing the wrong solution and not doing proper due diligence.

Finally, make sure you are on the same page with the AP solution providers team. At the end of the day, we are creating diverse long-term partnerships which involve ongoing communication so apart from the solution, you should also take into consideration the way the company answers your requests, advises you on the way to proceed etc., at that point it’s all about feelings, so trust your instinct.

V. Accounts Payable Processes To Automate & How

Of course, every company has its own needs, yet there are some AP processes that should be automated no matter your industry, size or goals. Most companies know which but struggle to understand how.

From our experience, the majority of our clients are looking to automate all or some of the 5 processes listed here:

I. Invoice Capture





Capturing incoming vendor invoices is a complex task. Most commonly, different types of files are sent,  with various currencies associated taxes. Some invoices require line item extraction, where others don’t etc.

Now, before automating this process, you should agree with all your suppliers (where possible) to send electronic invoices in PDF format and predefined terms.

With no paper invoices, you can now automate your invoice reception right from your email to mitigate document preparation and handling. Make sure you choose a solution with strong OCR capability as this is the 1st  milestone to a touchless experience.

Last thing, agreeing with all your suppliers in a unique format is theoretically what you can do best but the reality is that suppliers send invoices in a variety of formats. That does not mean you cannot automate your extraction process as the best OCR on the market can extract almost every electronic invoices format (All our solutions are capable of dealing with PDF, BMP, DOC, GIF, JPG, PNG, TIFF, DOC, DOCX, XLS, and XLSX for instance).

II. Information Matching





Some solutions are great at extracting information but lack the efficiency when it comes to matching the information. That’s not only harmful for your automation but also for your entire business as you could pay a vendor that is not in your system or does not even exist, which can be seen as fraudulent and which would turn out to be your responsibility. Your solution should at least check the following information and automatically notify your users when they are wrong:

– Company Business Number against the ABR and ERP

– Company Business Register against the ABR and ERP

– Bank Account Details off the invoice against the ERP

– Duplicate Checks of all details before any human intervention

– Currencies

III. Configurable Business Rules & Flexible Workflows





The second pain point for a lot of companies lies in the many steps their invoices must go through. No matter which ERP you are using, an accounts payable automation solution will always reduce the steps if the software provides a business rules framework.

Assuming you are processing invoices electronically, you can set up business rules and user permission to make sure that if an invoice requires approval, it goes to the right person. You can even set notifications with deadlines so that the user is aware of the invoice he or she needs to approve. The same goes for exception handling management for the many discrepancies that can occur.

If you have an efficient and configurable AP automation solution, most invoices will just go through the entire workflow following your business rules.

Remember, a solution that requires a high-level of customisation will be costly and take a long time to implement. A strong AP automation solution will provide you with extremely flexible business rules and workflow automation with little or no customisation required.

IV. Transparent Framework





Accounts Payable departments can be somewhat chaotic when not automated. Companies still relying on manual invoicing and excel sheets are the most concerning. You must have read throughout your research that 88% of spreadsheets have errors and if that is still your case, you are losing money.

Companies having their process automated to a certain extend usually reduce their manual error entries but are still failing at avoiding duplicate payments.

Current AP automation solutions provide the ability to avoid such errors as the workflow is automated and duplicates payment triggers either a warning or the impossibility to go further within the process.

Actually, a good AP automation system should provide a transparent platform where every action is recorded and associated with its user. Not only will that provide you with a clear understanding of your workflow for future improvements but also this will allow the system to assist with compliance, audit, and the detection of fraud.

V. A Document Library


When fully implemented, accounts payable workflow automation should cover every processing step from arrival to the final payment, including supplier invoicing, data capture, line item information extraction, price checking, validation, verification, routing, approval, posting, payment, and archiving.

The 5 functions described above are the most common ones and will allow you to improve your invoice processing costs drastically.

VI. The 10 Benefits of Automating your Accounts Payable

Obviously, you know all about the multiple benefits of automating your accounts payable but here is a quick recap to finish this guide on a great note.

 1. AP automation will reduce your time, by more than 80% by using the best OCR and exception management capability

2. Reduce or even mitigating errors altogether

3. Save money and optimise cash flow. If you are still processing invoices manually, you could reduce your processing costs by almost 90%

4. Monitor compliance and increasing process control

5. Expand process visibility

6. Negotiate discounts with early payments

7. Promote a collaborative and efficient workplace environment

8. Have total control over multiple workflows and users

9. Flexibility to scale up when necessary

10. And of course, gaining a competitive advantage. As we said at the beginning of this guide, the multiple new technologies currently available on the market have extended the entire set of possibilities for accounts payable departments. OCR using artificial intelligence, cloud-based solutions, flexible workflows, unlimited business rules, and seamless integration finally enable accounts payable processes to be fully automated, creating a touchless experience and financial benefits with a quick ROI. More importantly, the time saved and the efficiency of the workflow more than often establishes a safe environment for your team while drastically reducing human errors. This is an immeasurable benefit yet a strong factor that impacts positively on your competitive advantage.


According to a recent McKinsey Survey, only 13% of CFOs and other senior business executives polled said their finance functions are using robotic process automation (RPA) and artificial intelligence (AI).

On top of that, only 30% of finance transformation delivers on the forecasted benefits to the business. Despite these poor figures, senior executives are more and more inclined to spend time on digital solutions and on applying automation technologies for financial tasks.

Hence, the main challenge for businesses is to assess their situation and have a clear understanding of their needs. With so many solutions available, this guide will help you ask the right questions and make the appropriate decision.

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