AP Automation: Cut Chaos, Not Corners 

Accounts payable automation (AP automation) involves using software to automate common vendor invoice tasks. It facilitates manual tasks for the payable department and allows for paperless document management, invoice processing, PO matching, and payment reconciliation.

Traditional accounts payable teams are burdened by overhead, manual data entry, and inefficiencies. An AP system allows teams to scale without adding more staff, gain better visibility into financial data, and achieve financial close-ups 25% faster.

Accounts payable software is a more affordable, flexible, and easier solution than accounts payable outsourcing.

Accounts payable software optimises the accounts payable process in key areas where manual labour is causing inefficiencies, such as invoice processing, mass payments, data entry, price matching, and more.

The first step in invoice automation is data capture. An AP automation solution extracts all invoice data and automatically compares the line items with the purchase order information that is synced in your system, which is called PO matching. 

Automated invoice processing can also be used for matching other documents like inspection reports and shipping receipts.

It then routes the invoice to the correct approvers. Once approved, the software sends invoice data to an integrated ERP system while archiving data from digital documents, paper invoices, and audit trails. 

AP automation has many benefits. When automation software is used, accounts payable teams can reduce costs, eliminate routine tasks, and provide better visibility and control over financial data. It also facilitates cash flow and leads to early payment discounts.

Automation is the next step if you seek to scale your AP team. It’s an efficient tool for any modern CFO. AP software helps teams grow through automated invoice processing, cost savings, streamlined approval routing, stronger vendor relationships, reduced risk, and complete integration. 

Automation means you always pay on time, at the right time, every time. It solidifies supplier relationships, streamlines transactions, and keeps partnerships intact. This type of system will also help avoid late payment fees.

The cost of AP automation software depends on the tasks your business needs to perform and how you plan to automate accounts. The best AP automation software offers the following modules:

1. Scan and Archive: A document management system with invoice capture.
2. Archival and Auto-Matching: This includes internal controls for AP, such as front-end processing and approval workflows. For this type of system, associated spend will include the annual licence fee and related support costs, which include:
   1. Bi-directional integration
   2. Optical Character Recognition (OCR)
   3. Business intelligence 
   4. Robotic Process Automation (RPA)
3. Cloud-based Automation: In cloud-based AP automation, all infrastructure investments are made in the cloud, and the cost is shared. Usually, providers of this approach charge on a transactional basis instead of the licence model.  

According to Tipalti’s Invoice Processing and Cost Calculator, automated processing can save a business an average of £14.93 per invoice compared to companies that manually process their invoices.

Additionally, you can try Tipalti’s Payment Error Cost Calculator to help calculate costs due to errors.

Accounts Payable (AP) software helps companies manage their bills and payments efficiently, especially when it comes to tax compliance. AP software includes features and functionalities that address tax-related requirements accurately and timely.

Tipalti’s tax solution helps your company comply with all types of tax provisions and simplifies the AP process. Our guided tax form wizard assists suppliers in choosing the correct form based on the country and business structure. 

For non-US payers, local and VAT tax ID collection is available. If the foreign entity comes from a country with a U.S. tax treaty, they can fill out and submit a W-8BEN-E form.

Tipalti facilitates United States IRS AP tax compliance with KPMG-approved tax form data validation and withholding calculations.

Yes, vendors do interact with Accounts Payable (AP) automation software. However, the nature and extent of their interaction varies based on the specific software and the business needs. 

Here are several ways vendors might interact with AP automation systems:

Invoice Submission

Supplier invoices can be submitted electronically, creating a touchless process that reduces manual data entry.

Vendor Portals

Vendors can upload their invoices, manage account details, and check invoice payments in a self-service vendor portal.

Communication and Dispute Resolution

Through AP software, vendors can communicate directly with finance teams, which helps to resolve discrepancies or human errors quickly.

Payment Processing

One of the benefits of AP automation is fast payment processing. Vendors can check on payment status and sometimes offer early payment discounts based on electronic invoicing terms.

Registration and Profile Management

Vendors can register and manage profiles within an AP automation system. This includes tasks like updating contact data, payment preferences, and other relevant details.

Compliance and Documentation

Vendors may need to submit compliance documents (e.g., tax forms and certifications) through the software. Accounts payable automation software will also maintain a detailed audit trail, which vendors can access to review historical transactions and communications.

AP (Accounts Payable) automation will not replace your ERP system. Instead, it complements and integrates with your existing ERP to enhance its capabilities.

ERP system integrations are largely built around identifying back-end processes that can be streamlined with AP automation. Tipalti has pre-built integrations to connect to popular systems like Sage Intacct, NetSuite, QuickBooks Online, Microsoft Dynamics 365, Xero, and Acumatica. 

The Tipalti platform syncs bill and payment data in real-time, accelerating the reconciliation process. The level of integration depends on your needs and workflow.

ERP system integrations are largely built around identifying back-end processes that can be streamlined with AP automation. Tipalti has pre-built integrations to connect to popular systems like Sage Intacct, NetSuite, QuickBooks Online, Microsoft Dynamics 365, Xero, and Acumatica.

The Tipalti platform syncs bill and payment data in real-time, accelerating the reconciliation process. The level of integration depends on your needs and workflow.

Automation helps to reduce the AP portion of procure-to-pay cycle time. It’s a best practise for improving the AP workflow. It skips the endless approver follow-up that happens with manual invoice processing and eases the labour workload.

The system automatically verifies vendors and validates invoices. It then forwards the approval request to the right person in the organisation, completely automating the AP invoice approval process.

The invoice is automatically matched to the electronic purchase order in a two-way approval. Three-way approval requires those documents, plus a receiving report as the third item.

AP automation improves global supplier management in a variety of ways. It immediately alerts merchants when invoices have been paid. Real-time status updates can be sent via email when something is not paid.

An automated AP accounting system can also be used for vendor management and compliance, as well as collecting tax data for VAT.

AP automation software forges stronger supplier relationships, and when a situation demands increased support or supply, vendors will be willing to go above and beyond to meet your needs.

Accounts payable automation software improves the structure of an AP department by separating duties both inside and outside of the team. 

Proper segregation of AP duties is a requirement for solid internal controls. Other objectives include preventing fraud, matching responsibilities, and redefining roles to accommodate automation.  

Automatic payment reconciliation enables a business to upload an electronic version of a bank statement and automatically reconcile it. The bank provides the e-version using “matching rules” that are designated in the system. 

A business can speed up financial close with features like drill-down filters, transaction level details, ERP synchronisation, and real-time integrated reports.

Remittance results across all payment methods, entities, and geographies are instantly normalised and built into deep reporting. This leads to faster and more accurate reconciliation and general ledger reporting.

AP software improves oversight with a full view of B2B payment cycles and the analysis of accounts payable metrics. This is what makes AP software especially critical for operations for a small business.

When it comes to B2B payments, ACH transfers are the leading form of payment. Every year, cheque remittances steadily decrease while wire transfers are on the rise.  

When selecting the best accounts payable software, look for a system that finds duplicate payments.

Tipalti has built-in financial controls and artificial intelligence to identify duplicate invoices in your accounts payable workflow. Our system checks from when the invoice is uploaded to when it’s approved, even communicating with integrated systems. When a potential duplicate is found, the system will notify the user with an urgent notification.