Accounts Payable Automation

Using software to automate the capture, coding, approval, and payment of vendor invoices.

What Is Accounts Payable Automation?

Accounts payable (AP) automation refers to using software to handle some or all of the steps involved in processing vendor invoices — from initial receipt through to payment. In a manual AP workflow, every step requires human attention. Automation removes or streamlines the repetitive parts.

The AP Process

A typical AP workflow has five stages:

1. Capture — Receiving the invoice (email, mail, vendor portal) and getting it into your system. This is where data extraction tools like SkipEntry operate.

2. Data entry — Keying the invoice details into accounting software. This is the most time-consuming manual step and the highest source of errors.

3. Coding — Assigning GL codes, cost centers, departments, or job codes to the invoice or line items.

4. Approval — Routing for manager or owner sign-off before payment, especially for invoices above a certain threshold.

5. Payment — Scheduling and executing payment (check, ACH, wire, virtual card).

What Can Be Automated

Capture and data entry are the most mature areas of automation. AI-based extraction tools can automatically pull structured data from any vendor invoice format, eliminating manual typing entirely.

GL coding can be partially automated based on vendor history — if every invoice from a landscaping company has always been coded to account 6300 (grounds maintenance), the system can suggest or auto-apply that code.

Approval routing is automated in mid-market ERP systems (NetSuite, Sage Intacct) and increasingly in QBO/Xero via third-party add-ons like ApprovalMax or Stampli.

Payment can be automated through ACH batch processing or platforms like Bill.com (now BILL).

ROI for Small Businesses

For a small business processing 50–200 invoices per month, the ROI of AP automation concentrates at the data entry and coding stages. Eliminating 3–5 minutes of manual entry per invoice at 100 invoices/month saves 5–8 hours monthly — roughly one full work day that can be redirected to higher-value tasks or used to take on additional clients.

Error reduction also matters: manual data entry errors in AP can result in duplicate payments, incorrect amounts paid, and reconciliation issues that take additional time to untangle.

Tools at Each Stage

Capture + extraction: SkipEntry, Dext, Hubdoc, Veryfi
Approval workflow: ApprovalMax, Stampli, Airbase
Payment: BILL, Melio, Corpay
Full AP suite: Tipalti, Airbase, Brex (for larger orgs)

QuickBooks Online and Xero handle the GL and reporting layer, with third-party tools handling the upstream capture and downstream payment steps.