Guide to Evaluating AP Automation Before You Commit

In today’s fast-paced business environment, efficient accounts payable (AP) processes are more important than ever. The demand for automation is growing as organizations face mounting challenges such as increased invoice volumes, compliance requirements, and operational inefficiencies. During our recent webinar, 2025 Guide to Evaluating AP Automation Before You Commit, we explored how businesses can navigate the AP automation journey effectively. Here are the highlights and key takeaways from the discussion.

1. Understanding the AP Automation Buyer Journey

The journey to AP automation begins with identifying your organization’s unique pain points. Common challenges include manual invoice processing inefficiencies, compliance risks, and missed opportunities for early payment discounts. Organizations must assess these issues and align their automation goals with broader strategic objectives, such as scalability and cost optimization.

The buyer journey typically follows these stages:

1. Recognizing operational and strategic needs: This is the foundational step where businesses identify inefficiencies in their current AP processes. Operational needs might include reducing manual data entry, addressing exception rates, or minimizing invoice backlogs. Strategic needs, on the other hand, focus on broader goals such as scaling for growth, improving vendor relationships, or complying with evolving regulations. Taking stock of these needs helps create a roadmap for automation.
2. Exploring available solutions: Once needs are identified, the next step is researching AP automation tools that can address them. This involves looking at features such as OCR technology, ERP integration, and scalability. It’s also important to gather insights through product demos, case studies, and industry reviews to understand the capabilities of different vendors.
3. Building a compelling business case: A business case is essential to secure buy-in from key stakeholders. This involves calculating potential ROI, showcasing efficiency improvements, and emphasizing strategic benefits such as improved compliance and vendor satisfaction. Businesses should also address potential concerns, such as costs and implementation challenges, to strengthen their case.
4. Issuing an RFP and selecting a vendor: Once the business case is approved, the RFP process begins. An effective RFP should outline operational, IT, and compliance requirements. Vendor selection should prioritize ease of integration, scalability, and long-term partnership potential. Reviewing customer references and implementation timelines can also aid in making an informed decision.

2. Key Metrics to Evaluate Before Committing

To make informed decisions, businesses should evaluate their current AP processes using these critical metrics:

• Invoice Cycle Time: This metric measures the time taken to process invoices from receipt to payment. Long cycle times often result in missed payment deadlines, strained vendor relationships, and lost opportunities for early payment discounts. Automation significantly reduces cycle times by streamlining processes, ensuring timely payments, and enabling better cash flow management.
• Exception Rates: High exception rates—caused by issues like pricing discrepancies, missing goods receipts, or duplicate invoices—can bottleneck AP operations. Understanding these exceptions allows organizations to identify process inefficiencies and prioritize their resolution during automation. A lower exception rate means smoother processing and fewer manual interventions.
• Cost per Invoice: Benchmarking the cost per invoice is essential to assess the financial impact of current AP processes. Manual processing costs, often ranging between $15-$20 per invoice, can add up quickly for organizations with high volumes. Automation reduces this cost by eliminating redundant tasks and enabling efficient invoice handling.
• Processing Capacity: Evaluate how many invoices your AP team can handle efficiently. As organizations grow, so does their invoice volume. Planning for scalability ensures your team can manage increased workloads without additional headcount, making automation a cost-effective solution.

3. Building a Business Case for AP Automation

A strong business case is essential for gaining executive sponsorship and stakeholder buy-in. Here’s how to create one effectively:

• Highlight operational inefficiencies: Document existing challenges, such as invoice processing delays, high error rates, and manual inefficiencies. Use specific examples, such as missed early payment discounts or vendor complaints, to illustrate the impact.
• Present the ROI: Automation provides measurable benefits, including reduced processing costs, shorter cycle times, and improved compliance. Quantify these benefits to demonstrate the potential financial impact. For example, outline how much the organization could save by reducing the cost per invoice or capturing early payment discounts.
• Align with organizational goals: Tie your automation initiative to broader objectives, such as supporting business growth, improving vendor relationships, or achieving compliance with regulatory requirements. This alignment ensures the project is viewed as a strategic priority.
• Address potential concerns: Be proactive in addressing questions about costs, implementation timelines, and change management. Providing clear answers and examples of successful implementations can help build confidence among stakeholders.

4. Choosing the Right Vendor and Solution

Selecting the right AP automation solution is a critical step. To ensure success, consider the following factors:

• ERP Integration: The solution should seamlessly integrate with your existing ERP system to facilitate smooth data flow and eliminate redundancies. Integration is essential for ensuring the accuracy and reliability of AP data.
• Scalability and Multi-Entity Support: Choose a solution that can grow with your organization. Whether you’re expanding to new markets or acquiring additional business units, the system should handle increased invoice volumes and multi-entity operations effortlessly.
• End-to-End Functionality: Look for a solution that addresses every stage of the AP process, from invoice receipt to payment. Features such as OCR for invoice scanning, automated approval workflows, and real-time reporting add significant value.
• Vendor Track Record: Assess the vendor’s experience, support capabilities, and customer success stories. A vendor with a strong track record and a commitment to customer satisfaction is more likely to provide reliable support and continuous improvement.
• Cultural and Strategic Fit: Ensure the vendor aligns with your company’s values and long-term goals. A strong partnership with the vendor can make a significant difference in the success of your implementation.

5. The Benefits of AP Automation

Organizations that successfully implement AP automation enjoy numerous benefits:

• Enhanced Efficiency: Automation eliminates manual touchpoints, reduces errors, and accelerates processing times. This enables AP teams to focus on value-added tasks rather than repetitive data entry.
• Improved Visibility: Real-time insights and centralized control give AP teams a comprehensive view of invoice statuses, approvals, and payments. This visibility supports better decision-making and proactive management of vendor relationships.
• Cost Savings: By reducing the cost per invoice and capturing early payment discounts, automation delivers significant financial benefits. For example, companies leveraging early payment discounts can save thousands annually, directly impacting the bottom line.
• Scalability: As businesses grow, AP automation scales to accommodate increased invoice volumes without requiring proportional increases in headcount. This makes it a sustainable solution for long-term growth.
• Compliance and Control: Automation ensures adherence to company policies and regulatory requirements. Features like audit trails and approval workflows enhance transparency and reduce the risk of non-compliance.

Final Thoughts

Embarking on the AP automation journey is a transformative step for any organization. By evaluating your pain points, aligning automation with strategic goals, and choosing the right vendor, you can unlock significant operational and financial benefits.

View our Guide to Evaluating AP Automation Before you Commit webinar today or if you want to learn more, we’re here to help. Contact us for a pre-evaluation assessment or schedule a demo to explore how AP automation can revolutionize your processes. Talk to us today!