Automating accounts payable means using software to handle the full journey of an invoice, from receipt to payment, with minimal manual involvement. It captures information, checks it against your records, and routes it for approval.
How long does your team spend moving an invoice from the inbox to payment? For many businesses, manual tasks (data entry, PO matching, chasing approvals, and checking compliance) can stretch the cycle into days or even weeks.
The worst part? That delay grows as volumes rise! Now, automating accounts payable changes this completely. Studies show businesses using AP automation can process invoices 81% faster and cut costs by up to 91%.
Want to know more? Read this article to learn what automated accounts payable is, how it works, and changes your invoice workflow. Then check out some real case studies showing how businesses have benefited from using AP automation.
What is Automation of Accounts Payable?
Accounts payable (AP) automation is a tool that takes over the manual work involved in handling invoices. Instead of your team entering invoice details by hand or manually, the automated accounts payable system:
- Reads the invoice
- Checks the information
- Sends it to the right person for approval
- Then prepares it for payment
It also stores all records so you can find them later. Several modern AP tools of 2025 even use AI to understand invoices, spot mistakes, and learn from past work. They connect directly with your accounting or ERP software, so your process runs from start to finish without constant human input. The best part? The system continues working even after business hours, which reduces delays.
Some Advanced Software Also Includes “Process Analytics”
Some AP solutions include process analytics (Process AI). This shows you how your AP work is running in real time. You can see:
- Where are invoices getting delayed?
- How many invoices pass through without manual checks?
- How much time does your team spend on reviews?
The benefit? With these insights, you can remove bottlenecks, avoid late payments, and keep cash flow stable. Also, process analytics allow you to maintain better relationships with suppliers.
How Does Automated Accounts Payable Work? Learn in 5 Simple Steps!
Automated accounts payable uses software to handle the steps involved in receiving, checking, and approving invoices. This system:
- Reads invoices
- Pulls out key details
- Verifies the information
- Sends it to your accounting system for payment
This reduces manual work + cuts errors. For more clarity, learn how this system works in five simple steps:
| Step | Explanation |
| 1. Capture | The system:
and
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| 2. Classify | It identifies what type of document it is (invoice, receipt, PO, etc.) and sends it to the correct workflow so nothing gets lost or mixed up. |
| 3. Extract | The software reads the invoice and pulls out key details like:
|
| 4. Verify | The system checks the information against your:
and
Now, if something looks wrong, you or your team can review it. The system even learns from these corrections. |
| 5. Deliver | Once everything is confirmed, the data is sent directly into your accounting or ERP system. It is now ready for approval and payment. |
10 Major Benefits of Accounts Payable Automation
Studies show that about 52% of AP professionals now spend under 10 hours weekly on invoice processing (improved from 62% the prior year). Additionally, 87% of businesses automating related AR tasks report shorter processing times, with 79% noting productivity gains applicable to AP.
For more clarity, let’s see ten different ways automated accounts payable helps growing D2C companies and consumer brands:
1. Faster Invoice Handling
Invoices move from receipt to approval without manual chasing. The system routes invoices to the right people and keeps the process moving so payments are not delayed.
2. Lower Operating Costs
You spend less on manual work, paper, printing, and storage. You also avoid costly errors and late payment charges.
3. Fewer Mistakes
The system reads and checks invoices with high accuracy. This reduces the back-and-forth work caused by data entry errors.
4. Higher Team Productivity
Your team spends less time typing invoice details or tracking approvals. Instead, they can focus on tasks that support growth and planning.
5. Better Control Over Cash Flow
You get a clear view of:
- What you owe
- When payments are due
- Where money is stuck
This helps you avoid late fees and even use early-payment discounts.
6. Stronger Compliance and Lower Fraud Risk
The system cross-checks invoices against your purchase orders and rules. This reduces fake invoices, duplicate payments, and audit issues.
7. Better Decision-Making
With built-in analytics, you can track:
- How fast do invoices move
- How many go straight through without review
- Where delays occur
Several VPs and directors of D2C companies use these insights to improve their operations.
8. Scales with your business
As your invoice volume grows, the system handles the extra load without needing more staff or major process changes.
9. Stronger vendor relationships
Suppliers get paid on time with fewer disputes. This builds trust and may open the door to better rates or priority service.
10. Lower environmental impact
Digitizing invoices reduces paper use + storage needs. This supports your business’s sustainability goals.
Latest Automate Accounts Payable Case Studies 2025
Many companies across different industries have moved from manual invoice processing to accounts payable (AP) automation. The results show the same pattern:
- Less manual work
- Fewer error
- Lower costs
- Faster processing
To improve your understanding, check out some latest case studies below:
| Industry | Business Challenge | How AP Automation Helped | Results |
| Financial Services | A banking technology firm had slow invoice handling and too much manual data entry. | The system took over document reading, data entry, and routing. |
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| Food & Beverage | A dairy cooperative was manually processing 300,000 invoices a year. | Automation handled a large share of the work, reducing manual effort. |
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| Manufacturing | A marine equipment maker had sales reps spending up to 45 minutes entering long purchase orders by hand. | The system read and entered multi-line orders quickly. |
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| Technology | Clients of a global automation company struggled with slow, error-prone PO entry. | AP automation replaced manual entry with automated processing. |
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| Wholesale Trade | A global wholesaler processed all invoices manually, which caused delays. | AP automation moved invoices through the system automatically. |
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Want to Automate Accounts Payable in 2025? Let Atidiv Guide You!
So now you know what automated accounts payable is. It is a system that reads invoices, checks the details, routes them for approval, and pushes the information into your accounting platform without constant manual effort.
And benefits? It removes repetitive work and leads to:
- Faster invoice handling
- Lower operating costs
- Fewer data entry mistakes
- Better cash flow visibility
- Stronger compliance and lower fraud risk
- Higher productivity for your finance team
- Better relationships with vendors
If you need assistance automating your AP or want to outsource your accounting department, Atidiv can help you. We are an accounting outsourcing company with 70+ global clients like Fabletics, Shoedazzle, JustFab, FreshCleanThreads, and more.
Our expert team includes 390,000+ chartered accountants and CPAs, delivering 100% accuracy and a 95% client retention ratio. Want to get started? Schedule your call today!
Automate Accounts Payable FAQs
1. What is automated accounts payable?
Accounts payable (AP) automation is a system that handles the steps involved in receiving, checking, and approving invoices without constant manual work. This system can:
- Read invoices
- Pull out the required details
- Check them against your records
- Send the information to your accounting software for payment
The major advantages? AP automation reduces errors, shortens payment timelines, and gives you better control over your cash flow.
2. Why should I switch to AP automation when my manual process “still works” in 2025?
Manual AP processes slow down payments, create errors, and hold back scale. Studies show that about 84% of accountants link automation to fewer errors and 81% link it to lower costs. As invoice volume grows, automation prevents bottlenecks and keeps your payment cycle predictable.
3. Is “cloud-based AP automation” better than “on-premise systems”?
Cloud AP automation is becoming the preferred choice because it scales easily and offers real-time access. Studies show that it is growing at a 14.7% CAGR, faster than on-premise systems. Interpretation? More businesses are moving to cloud tools that update automatically and support remote or distributed teams.
4. Can I handle large invoice volumes or complex workflows by automating accounts payable?
Modern AP tools are built for high levels of demand. Sectors like BFSI are already using AP automation to manage their heavy workloads and hold about 35% market share.
Several AP automation software can route invoices automatically, match POs, flag issues, and support multi-step approvals without adding more staff.
5. Will AP automation integrate with my existing accounting or ERP software?
Yes. Most modern tools connect through APIs and plug into common ERPs. This prevents duplicate data entry + keeps records clean. Also, your finance team gets one reliable source of information.