Accounts payable automation: How it works and how to use it to improve your billing

A manual accounts payable (AP) process is more than just tedious—it’s costly. Tracking down invoices, chasing approvals, and correcting payment errors eat up hours your finance team could spend on strategic work. In a 2024 study, 52% of AP teams said they spend over 10 hours a week processing invoices. That’s the time you could get back.

Accounts payable automation replaces outdated processes with intelligent workflows that speed up approvals, reduce errors, and improve visibility. It helps you scale without adding headcount and keeps vendors paid on time. Your business growth depends on speed and precision. Let's explore how AP automation gives you the competitive edge.

Jump to:

• How accounts payable automation software works
• Are outdated AP processes holding you back?
• AP automation benefits: Reduce invoice processing time
• AP automation reduces costly errors and ensures payment accuracy
• Free up your finance team for strategic work
• Best practices for a successful AP automation rollout
• Streamline your accounting and save time

How accounts payable automation software works 

Accounts payable automation replaces time-consuming manual tasks, like entering invoice data and chasing approvals, with digital workflows that streamline the entire process. Instead of juggling spreadsheets and emails, your team can manage everything from a centralized platform.

Automation also improves accuracy and creates a clear audit trail, making it easier to track invoices, spot errors, and prepare for audits. With faster, more transparent approvals, vendors get paid on time, helping you avoid late fees and build stronger supplier relationships.

The core features of AP automation tools

Top accounts payable automation software uses OCR (optical character recognition) to capture invoice data and reduce manual entry errors. Some software, like QuickBooks Bill Pay, uses AI to capture bill data. Smart routing automatically sends invoices to the right approvers, cutting delays and bottlenecks.

You also get real-time visibility into payment statuses—so your team always knows what’s pending, approved, or paid. This keeps cash flow predictable and vendors happy.

What is three-way matching in AP automation?

Three-way matching is a built-in safeguard that ensures your business only pays for what it actually ordered and received. By automatically comparing the purchase order, the supplier’s invoice, and the receiving document, you can catch discrepancies before money goes out the door.

This matching process verifies that:

• The purchase order reflects what was approved.
• The invoice matches the expected cost and quantity.
• The receiving report confirms that the goods or services were delivered.

When all three documents align, the system greenlights the payment. If anything’s off, like a price mismatch or an item that wasn’t delivered, it gets flagged for review.

While this process is often manual and time-consuming, AP automation software handles it behind the scenes. 

It’s a smart way to tighten controls, cut down on manual checks, and protect your bottom line, especially as your vendor list and invoice volume grow.

Are outdated AP processes holding you back?

Manual accounts payable processes waste valuable time, increase costs, and leave too much room for human error. Paper-based workflows and scattered spreadsheets make it hard to stay organized, especially as your business grows.

Without automation, it’s difficult to scale, maintain visibility, or ensure timely payments—all of which can hurt your cash flow, slow down operations, complicate vendor management, and strain relationships.

Common pain points in manual AP workflows

If you're still relying on spreadsheets, emails, or paper to manage payables, you're not alone—but you're likely dealing with unnecessary headaches. Manual AP processes create inefficiencies that cost time, money, and trust. These roadblocks can slow your business down and put you at greater risk for errors and compliance issues.

Here are the most common issues finance teams face with manual AP processes:

• Lost or misplaced invoices: Paper invoices or scattered email attachments often go missing, delaying payments and damaging vendor relationships.
• Difficulty tracking approvals: Without centralized workflows, it's hard to see where an invoice is stuck or who’s responsible for moving it forward.
• Inconsistent approval policies: Manual systems often rely on informal rules or memory, leading to inconsistent decisions and compliance gaps.
• Limited audit readiness: Pulling together audit documentation is slow and error-prone without a digital trail.
• Late payment penalties: Missed deadlines due to manual lag can result in fees and strained vendor relationships.
• High invoice approval times: Manual routing slows down approvals, creating bottlenecks that delay payments and frustrate vendors.
• Frequent errors and duplicate payments: Hand-keyed data increases the risk of costly mistakes, including overpayments and processing the same invoice more than once.
• Lack of visibility and security risks: It’s hard to track invoice status, detect fraud, or ensure compliance with internal controls with disconnected systems.

AP automation benefits: Reduce invoice processing time

Manual approvals slow everything down. AP automation speeds up invoice routing, shortens approval cycles, and eliminates bottlenecks—so you can process invoices in days, not weeks.

Faster processing leads to lower costs per invoice and fewer late payments. Automation also helps you take advantage of early-payment discounts more consistently, boosting your bottom line.

Plus, with real-time tracking and automated alerts, your team always knows what’s pending and what’s been paid—no need to chase down emails or paper trails.

The numbers behind the savings

The financial impact of automation is clear. While manual invoice processing can cost up to $15 and take over 10 days, automation cuts that down to just a few dollars and a few days.

With fewer errors, faster approvals, and more discounts captured, the best accounts payable automation software pays for itself, often within months of implementation.

Streamline your business processes 

Manual workflows can’t keep up with a growing business. AP automation helps you scale without increasing headcount by streamlining routine tasks and easily supporting higher volumes.

Whether you're adding vendors, expanding locations, or closing books faster, automation gives your finance team the speed and flexibility to move with your business.

Automation drives AP performance benchmarks

Automated systems allow one person to handle a much higher volume of invoices, often 2-5x more than with manual processes.

You also gain consistency, with fewer delays or missed steps, which is key for maintaining control and performance as your business grows.

Tools like QuickBooks Bill Pay can streamline accounts payable with tools that help automate manual processes, optimize cash flow, fuel business growth, and stay tax ready. Plus, with QuickBooks automation tools you can cut down manual entry by half when you record bills. **

AP automation reduces costly errors and ensures payment accuracy

Manual AP processes are prone to human error, like duplicate payments, incorrect amounts, or missed due dates, which can damage vendor relationships and drain cash flow. Every mistake costs time, money, and trust.

AP automation reduces these risks by standardizing invoice processing, enforcing approval rules, and flagging inconsistencies before payments go out. It also adds built-in controls that protect sensitive data and reduce business fraud risk.

Real stats on AP error reduction

Many businesses still use manual invoice entry, which is a major source of AP errors. Automating more steps in the AP process and integrating with ERP systems can help your business significantly reduce these risks.

Here’s what the latest data shows:

• 60% of AP teams still manually key invoices into accounting systems, increasing the chance of human error.*
• 52% spend over 10 hours per week processing invoices, often due to manual steps that automation can eliminate.*
• Organizations that adopt ERP-integrated AP automation report faster processing, reduced bottlenecks, and fewer inconsistencies.
• Companies using AI-powered tools see better fraud detection, improved accuracy, and more strategic AP decision-making.*
• Partial automation still leads to workflow gaps and data errors—full integration offers the biggest performance gains.**

Free up your finance team for strategic work

Automating accounts payable frees your team from repetitive tasks like data entry, invoice matching, and chasing approvals. Instead, they can focus on higher-impact work like forecasting, budgeting, and vendor analysis.

This shift boosts productivity and improves job satisfaction. Employees spend less time on tedious work and more time contributing to business growth, which helps with retention and team morale.

Automation also aligns finance more closely with strategic goals, enabling your team to support decision-making with better insights and faster reporting.

Reimagine your AP team’s role

With automation handling the routine, your AP team can step into a more strategic role—analyzing spend trends, optimizing cash flow, and identifying cost-saving opportunities.

Instead of processing paper, they can help your business negotiate better vendor terms, support audit readiness, and contribute to cross-functional initiatives that drive growth and efficiency.

Best practices for a successful AP automation rollout

Rolling out accounts payable automation is more than just flipping a switch—it takes planning, collaboration, and clear direction. Follow these best practices to ensure a smooth transition and lasting impact.

Get the finance team's buy-in early. Involve your AP and finance teams from the start. Their insights into current workflows and challenges will shape a solution that actually works. Early buy-in also reduces resistance and speeds up adoption.

Set clear goals before implementation. Know what you want to achieve—faster approvals, lower costs, fewer accounting errors, or all of the above. Defining success upfront helps you choose the right tools and ensures alignment across teams.

Track key metrics to measure success. Once your system is live, monitor performance regularly. Metrics give you a clear picture of progress and help you fine-tune processes for continued improvement.

Top 5 metrics to monitor

To get the most out of your AP automation investment, you need to measure what matters. Tracking the right metrics helps you gauge performance, spot inefficiencies, and demonstrate ROI to stakeholders.

Focus on these five KPIs to track the impact of your AP automation:

• Invoices processed: Track how many invoices you handle monthly or quarterly. A steady increase can show improved efficiency and scalability.
• Cost per invoice: Calculate the total cost to process each invoice, including labor, software, and overhead. Lower costs usually signal stronger automation.
• Cycle time: Measure the time from invoice receipt to payment. Shorter cycles mean quicker approvals and healthier vendor relationships.
• Error rate: Fewer mistakes mean your automation is working. Monitor error types—like duplicates or mismatched POs—to spot weak points.
• Early payment discount rate: Track how often you’re capturing early payment discounts. A rising rate shows that your AP process is becoming more proactive and cost-effective.

Streamline your accounting and save time

Manual AP processes slow you down and open the door to errors. Accounts payable automation accelerates approvals, improves accuracy, and lets your team focus on strategy instead of tedious data entry. It’s a smarter, more scalable way to manage payables.

QuickBooks Bill Pay helps you take control of AP with built-in automation that simplifies invoice intake, tracks payments, and reduces delays. Explore how it can transform your AP process today.

Disclaimers:

* Accounts Payable Automation Trends 2024

** AIMultiple: Accounts Payable ERP Integration Insights

** QuickBooks Bill Pay: QuickBooks Bill Pay account subject to eligibility criteria, credit, and application approval. Subscription to QuickBooks Online required. Not available in U.S. territories or outside the U.S. Money movement services are provided by Intuit Payments Inc., licensed as a Money Transmitter by the New York State Department of Financial Services. For more information about Intuit Payments' money transmission licenses, please visit https://www.intuit.com/legal/licenses/payment-licenses/.

Reduce manual entry by 57%: Based on U.S. QuickBooks customers who record bills in QuickBooks using automation tools on the Apps/Bills page compared to customers not using these tools, from February 2024 to January 2025.