What is accounts payable automation (AP automation)?

An accounts payable software helps you manage and pay all your vendors, suppliers, and creditors. The system can create payment automation to save time and make business operations more efficient.

Volopay is an AP automation software that can transform the way your business carries out financial operations.

What is accounts payable?

Accounts payable refers to all the money that is owed by your business to other individuals or businesses. It is the responsibility of the finance department in a company to keep track of all transactions related to the accounts payable process and other tasks associated with it such as vendor invoice management.

A finance department manages the transactions from different vendors, suppliers, creditors, investors, etc. by creating subsidiary AP ledgers for them. Modern businesses use a vendor management system like Volopay to keep track of vendors, all their invoices, and ensure timely payment processing for each one of them.

Difference between accounts payable vs accounts receivable

While accounts payable deals with money going out of a business accounts receivable deals with money coming inside a business. Both are managed by the finance team in a company. Accounts receivable also entails creating invoices to be sent out to clients and following up with payment reminders. 

To do this, finance professionals can use invoice processing software to send out invoices to their clients. Creating and maintaining both accounts payable and accounts receivable is important as it helps the accounting team to generate accurate financial statements and close the book of accounts on time.

To know more, check out our detailed guide on accounts payable vs accounts receivable

What is accounts payable automation?

Put simply, accounts payable automation refers to the process of using technology to digitally handle your accounts payable (AP) processes.

Instead of manually documenting invoices, performing invoice matching, and chasing down approvers, you’ll be able to utilize a system designed specifically to automate these tasks.

These digital and automated workflows will streamline your accounts payable and improve efficiency and accuracy. 

How does accounts payable automation work?

You may already be familiar with the way the accounts payable process works, but there are some key differences between doing several components manually and using digital automation tools.

Here are some ways that AP automation can make the process easier at each step.

1. Invoice capture

Manual process

With a manual process, your vendors will likely send you a paper invoice, which means you’ll have stacks on stacks of them to work through. Not to mention that they can be difficult to process without a standardized format. This is also true for PDF invoices.


Accounts payable automation technology allows you to capture your invoices digitally, regardless of how an invoice is sent to you. Ideally, vendors will be able to send invoices electronically with a standardized digital format that AP platforms can recognize and capture.

2. Data extraction

Manual process

When you get sent a paper invoice or an invoice through email, you’ll have to perform manual data entry and enter the invoice information into your accounting system. The more invoices you have to process, the more time-consuming this administrative process will be.


Knowing how to automate accounts payable means knowing about optical character recognition (OCR) technology, which allows you to simply scan or take a photo of an invoice document to extract its data. All it takes is a few seconds and even fewer clicks.

3. Invoice approval workflow

Manual process

Having a manual invoice approval workflow means that much of the work involves chasing approvers from desk to desk to get their physical signatures. It’s a slow process that could result in delays if you can’t find an approver to give you a signature.


An accounts payable automation solution can digitize and centralize your approval workflows. Automatically route each invoice through its appropriate workflow and allow the system to send approvers alerts. Approvers can review and approve requests within minutes—no more delays involved.

4. Matching and validation

Manual process

Before an invoice can be paid off, you’ll have to ensure it contains all the right information by manually comparing it to its corresponding purchase order. This means going through all your documents one by one and manually matching and validating all the information.


There’s no need to go through each document manually and spend long periods of time performing invoice matching. Get an automated matching system that can read both invoices and purchase orders to match them.

You will automatically be notified of any discrepancies or irregularities.

5. Payment processing

Manual process

After invoices have been matched and approved, you’ll still have to initiate and process payments. The traditional manual way to do this would be to use a payment method of your choosing and initiate the transaction separately. You’ll then reconcile it with the general ledger.


An AP automation solution should be able to help you facilitate electronic payments without having to click out of the platform. Get different payment options such as bank transfers and card payments to settle your invoices. Recurring payments can also be set up automatically.

6. Reporting and analytics

Manual process

Gone are the days of having to manually search through a lot of data to formulate and generate reports. While it is possible to create several reports in this manner, it gets harder to do the more reports you have.


An AP automation solution can help you solve this problem. All you have to do is select which data you want to use and what report type or format you want to generate. You can also get in-depth analytics of your data pattern.

7. Audit trail

● Manual process

Audits are notoriously difficult to prepare for, but they’re even worse when you have to put together your audit trail manually. That will involve plenty of scrounging around for the right data and information, as well as organizing them into a cohesive audit trail by hand. Overall, it’s a time-consuming process.

● Automation

With accounts payable automation, it will take no time at all for you to compile an audit trail. All the information you need is easily accessible and already organized on your AP platform.

8. Document storage and retrieval

● Manual process

With a manual process, storing and organizing documents will take up a lot of your time. You will have to invest in either file cabinets or spend time categorizing your documents into different folders on your desktop.

● Automation

There’s no need for all that hassle with accounts payable automation technology. All your data can be stored in a server, with cloud-based platforms allowing you to store it on a remote server that is accessible from anywhere with an internet connection. Storing and retrieving data are made simple.

9. Supplier collaboration

● Manual process

Instead of relying on long back-and-forth worth of text messages, collaborating with your suppliers is much easier to do with accounts payable automation. Your suppliers will be able to send invoices directly to your platform, eliminating delays in the invoice receipt step of the process.


Once you’re ready to pay your invoice, you can also do it immediately through the AP automation platform. As soon as you get a notification that the transaction is successful, you can let suppliers know that the invoice has been settled.

Want to get started with AP automation?

Advantages of accounts payable automation

1. Time savings

The accounts payable process is notoriously complex and time-consuming, especially when performed manually.

You can cut the time taken to complete each step of the accounts payable cycle by half when you use tools that allow you to automate the process.

Matching your invoices with their corresponding purchase orders and delivery receipts, for example, can be automatic.

2. Faster approvals

Routing invoice approvals for payments can be done automatically on a single platform with accounts payable automation technology. By setting up custom approval workflows, you can make the approval cycle faster.

Each invoice will automatically be entered into the appropriate approval workflow, eliminating the need to chase approvals from desk to desk.

3. Improved visibility

Accounts payable automation guarantees that all your related data is updated in real-time. You’ll know the status of all your invoices at any time, which is easily accessible in just a few clicks.

You can also check how far into the approval workflow each invoice is and which payments have been made, ensuring better visibility.

4. Enhanced compliance

Manual accounts payable makes it difficult for you to maintain compliance within the entire organization.

With accounts payable automation technology, however, you can set up notifications and alerts for suspicious invoices or transactions, which will be automatically flagged.

The automated approval workflows also mean that all approvals will be trackable and controlled.

5. Data security

Most accounts payable automation technology and tools also offer additional security for your data. It’s easy to centralize your data and use just a single platform for every step in the process.

This way, you’re less likely to lose data. Not only that, but you also get to store your data in an encrypted cloud-based server.

6. Scalability

It may be easy to do the accounts payable process manually when you’re just starting with your business, but you’ll want to know how to automate accounts payable to scale better.

Accounts payable automation software allows you to scale your business hassle-free. You won’t have to worry about spending too much time on administrative work.

7. Accuracy and error reduction

One of the biggest problems you’ll run into with doing your accounts payable work manually is that it’s difficult to maintain accurate records. You’re bound to run into errors at some point, which are time-consuming to fix.

Automating your accounts payable is not only time-saving, but it also makes sure that your records are accurate. 

How to choose the right accounts payable automation solution

The right accounts payable solution may differ from business to business, depending on what the needs of each business are.

However, there are some common key factors that every company should consider when selecting an AP automation solution. These can serve as your guidelines and are easily customizable according to your needs.

1. Integration capabilities with existing systems

You probably already have other systems in use to help you with your business processes.

To avoid data silos and mismatches between systems, it’s recommended that you pick an accounts payable automation solution that has integration capabilities with the systems you already have.

Most accounts payable technology will offer some form of integration, but you must consider integration with the specific systems you use.

2. Customization and scalability options

Each business will have slightly different accounts payable needs. To find the best way to automate your accounts payable, you want a solution that has customization options to suit your business.

The more customization options available, the better. Solutions that allow you to personalize the software according to your business needs will also make it easier for you to scale.

3. Ease of use

Alongside wanting the best features for your accounts payable automation solution, you also want these features to be easy to use.

When you’re exploring a particular provider, ask if you could see what the platform looks like or get a free trial. This will help you familiarize yourself with the system before you commit to it. You want a system that is intuitive and user-friendly.

4. Reporting and analytics

Other than features to help you automate the accounts payable process, you also want good reporting and analytics of the process. Look for a platform that allows you to automate AP reports.

You’ll save a lot of time by automatically generating reports using the data available. Ideally, you also want customization options to create the exact reports you need.

5. Mobile accessibility

Knowing how to automate accounts payable using a desktop computer is useful, but the best solutions should be easily accessible from anywhere. Try to look for an AP automation solution that offers mobile accessibility.

This way, you and your accounts payable team can collaborate and complete work remotely. There will be no more delays in your processes when people can easily approve invoices.

6. Customer support and training

Setting up an AP automation solution and familiarizing your team with it takes some time and effort. Consider whether a software provider is well-known for its good customer support and service or not.

When you’re shopping around, ask representatives of different providers if they offer training sessions. Getting someone to train your staff will be helpful in the overall implementation process.

7. Reviews and references

No matter how good an AP automation solution sounds, you want to make sure that you know of its reputation before committing to any particular platform.

The best accounts payable automation technology will have a reputation of being trustworthy.

Make sure that you check out reviews and references from other customers to see how the system performs and whether or not it has issues. 

Streamline your vendor payouts process now

Accounts payable automation implementation


Assessment and planning

Before you even begin to implement accounts payable automation within your organization, it’s key that you understand where you are with your business.

Assess your current accounts payable processes and identify what some of your pain points are. This will help you when it’s time to choose an AP automation solution.

You also want to outline a rough plan for the implementation process.


Define the requirements

Once you have assessed your business needs, it’s important that you draft out what you’ll need to tackle the pain points you have.

Different AP automation solutions will have different features available, meaning that it’s necessary for you to know exactly what you need so that you can pick the right solution for your business.

If there are requirements, make sure you don’t skimp on them.


Choose the right provider

Do thorough research on all the different accounts payable automation technology providers.

The best platform for another business may not be the one that suits your business best, as every organization will have different needs. It’s important that you choose the right provider for you.

Make sure that the features they offer are in line with what you’re looking for.


Integration planning

When you get a chance to speak with a representative from a particular provider, you want to ask them about what integration the system supports.

It’s recommended that you work closely with your provider of choice to integrate your accounts payable automation software with other existing systems, such as your ERP and accounting software.

Make an integration plan and coordinate with your provider accordingly.


Employee training

Before you begin using your AP automation solution, you must first make sure that your employees have received sufficient training.

You want to create a training plan even before the system installation, but it’s even more crucial after the system has been installed.

Host multiple employee training sessions to ensure that you have explained the technology thoroughly and addressed any issues or queries.



The last thing you want to do is overwhelm your accounts payable team by rushing the implementation process.

The best way to do this stage is to plan it carefully before you get started and implement your accounts payable automation technology in phases.

This helps your employees get comfortable with a particular feature before learning about another feature, allowing them to use the system efficiently.


Monitoring and optimization

The process isn’t wrapped up just because you have finished implementing the software.

Once everything has been installed and your employees have started using the system for daily accounts payable activities, you want to make sure that you’re monitoring its usage.

Allow employees to give feedback on how the system runs. You should address issues and continuously optimize according to your business needs.


Security and compliance

Other than monitoring and reviewing for optimization, you should make sure that you do regular security and compliance checks.

Make sure that there are no password leaks and that every employee is adhering to the policies you have in place regarding logging into the accounts payable automation software.

Refer to your accounts payable policies to ensure that the automation implementation complies with them all.

Measuring success and key performance indicators (KPIs)

Given that there are a lot of factors to consider when choosing and implementing an accounts payable system, it’s important that you understand how to assess the effectiveness of the system.

Make sure that you have key performance indicators (KPIs) to refer to. Here are some common KPIs to measure the success of your AP automation solution.

1. Processing time

Make note of how long it takes you to process an invoice, from the receipt to the payment. When you implement an accounts payable automation solution, you should be able to reduce the processing time of an invoice.

You want to reduce the processing time by at least 20%, but the higher the reduction, the better.

2. Invoice accuracy

Keep a close eye on what your invoice accuracy looks like before and after you implement accounts payable automation technology.

While you may run into errors during the training period as your employees are getting used to your AP system, you want there to be fewer errors in the long run.

3. Invoice approval cycle time

There’s a lot of emphasis on more efficient approval workflows when it comes to AP automation.

Other than a shorter overall processing time, you want to specifically measure the invoice approval cycle time after you know how to automate accounts payable. You should see faster cycles by eliminating manual approval processes.

4. Supplier satisfaction

When you add up different factors such as shorter invoice processing time and improved accuracy, your suppliers are bound to be more satisfied.

It may be a bit difficult to measure supplier satisfaction without other metrics, so make sure you specify how to measure this particular KPI when assessing the effectiveness of your accounts payable automation technology.

5. Compliance adherence

One advantage of AP automation software is that you’ll be able to improve compliance adherence, with suspicious reports being automatically flagged.

With approvals easily tracked as well, employees should be more conscious about complying with policies.

You want to regularly review if compliance adherence within your organization has improved after implementing automation.

6. Error resolution time

You naturally will reduce the amount of errors during the AP process when you improve your accuracy by using accounts payable automation software.

Another important metric that you want to keep in mind is the error resolution time, which should be reduced thanks to features that help you flag discrepancies.

How Volopay’s AP automation helps your business

Bill pay

Optical character recognition (OCR)

Every time your business receives an invoice from a supplier or vendor, using the OCR(optical character recognition) technology, our invoice management software scans and reads the invoice to automatically generate a bill within the system.

This saves your finance team a lot of time spent on manual data entry when the invoices need to be paid.

payment history for managing unnecessary expenses

Alerts and payment history

A smart accounts payable software will be able to tell the difference between an unpaid invoice and a duplicate invoice. Volopay’s alert function notifies you when you are close to the due date of an invoice.

The payment history feature will reduce incidents of late payments and help you avoid duplicate payments by letting you see your payment history.

Invoice management

3-way invoice sourcing

A major reason why companies face late payment fees is that their invoice sourcing is not organized in one place. They are scattered making it tough to keep track of every invoice.

With Volopay’s 3-way invoice sourcing, invoices are automatically synced from your email, accounting software, and can directly be uploaded to the platform. This way you won’t miss out on any payments.

Two-way sync of bills from accounting software

Two-way sync of bills

We know that the details of any expense are important for accounting and auditing purposes.

This is why Volopay has enabled two-way sync of bills between our platform and the accounting software that you use.

Minute details like a vendor’s name, invoice date, due date, item description, quantity, amount, tax code, are all automatically scanned and synced to your accounting tool.

Different payment methods

Different payment methods

The Volopay platform provides you with two major payment methods to choose from for domestic and international payments.

You can send money via SWIFT, which is a vast messaging network used by banks and other financial institutions to keep track of exactly where your payment is.

You can also send money to 40+ countries in their local currencies through a Non-SWIFT method which is more economic, faster, and money received by the receiver is in full.

Schedule payments

Schedule payments as per convenience

Accounts payable automation software also gives you the ability to schedule payments. Using Volopay, you get to schedule invoice payments in three ways.

Firstly, you can select a custom date and schedule the payment for that day. Secondly, you can schedule a payment as soon as the approver on the platform approves it.

And lastly, you can also schedule invoice payments right before the due date so you get to hold money for as long as possible in your account and earn interest on it.

Multi-currency wallets

Multi-currency wallet

Volopay allows you to create multi-currency wallets and store money in different currencies. This lets you pay international vendors or suppliers in their local currency, and save on FX charges.

Additionally, the receiver gets the money in full without you having to pay extra in the first place to ensure that vendors receive the amount that they’re supposed to.

Vendor payments

Create recurring payments

Paying invoices is a task that your finance team will do every month. There will be vendors you will have to pay every month.

With Volopay you can create recurring payments to these suppliers.

Set a particular date and payments for an invoice will go out every month without the need for manual interference.

International payments

International payments

Sending international payments with Volopay is a breeze. Our platform allows you to transfer money to 100+ countries in 65+ currencies.

This is possible through our integration with Rapyd, which is the world’s largest local payments network.

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How to prevent duplicate invoices?

A great way to prevent duplicate invoices is to use an invoice management system like Volopay which is equipped with an OCR feature.

The optical character recognition technology scans invoices and matches them against relevant documents such as bank statements or purchase orders to verify whether such payment has already been made or not.

Extremely identical invoices will be flagged and you will manually be able to check and verify whether the invoice is new or just a duplicate.

How automating Accounts Payable can help improve cash flow?

By automating the accounts payable process, you’re essentially speeding up payments to your vendors, suppliers, etc. It also reduces the number of unplanned expenses which in turn helps to maintain a balance of cash flow from one month to the next.

How do multi-currency wallets work?

Multi-currency wallets on Volopay let you maintain separate wallets on the platform with a currency of your choice from the ones that are available. You can use these to send payments to a country without having to bear any FX charges.

How does the bill creation process work with Volopay?

Once an invoice is sourced onto the Volopay platform, it is scanned and a bill is generated for it. The bill is then notified to the approver to check and verify whether the payment is good to be made.

Once the approver approves the request, the payment will be made with money being transferred from your bill pay balance. In case you had scheduled the payment, it will be executed accordingly - as per the due date/once the approver approves the request/ a custom date set by you.

Want to automate your accounts payable process?