AP Automation Software
AP Automation
Tradeshift is the fastest-growing networked accounts payable automation platform in the world. Businesses like DHL, Air France-KLM, and Schaeffler use our AP automation solution to settle thousands of invoices every day.
What is AP (Accounts Payable) Automation Software?
AP automation AKA accounts payable automation is made possible by cloud-based software solutions like Tradeshift Pay that automate and digitalize the accounts payable process.
For most businesses, the starting point is typically moving from a manual invoice handling process and migrating to an electronic process where data entry is reduced, and finally, to an automated process, where tasks are eliminated. With increasing levels of automation, accounts payable (AP) teams can focus on more strategic imperatives.
Essentially, AP automation significantly reduces the time and labor involved in paper-based manual accounts payable invoicing, as well as reducing the risk of costly human errors. Better control, increased visibility, and higher efficiency are the goals of accounts payable automation.
How accounts payable automation can help you succeed
With AP Automation, you can modernize your accounts payable process with improved control, better visibility, and increased efficiency. All of these lead to lower transaction costs and cost savings.
AP automation software solutions give you a single environment where you can see every invoice and every payment at any time. This means you can keep better, more accurate tabs on your invoice approval process and any potential bottlenecks to on-time payment.
Visibility into payments and payment automation similarly provide many benefits. Without a doubt, digital payments offer lower costs over payment by check. Digital payments may even become a revenue source if/when payment is made by virtual credit card.
Most importantly for your AP team, payment visibility can be given to your suppliers thereby eliminating the likelihood of having to spend time handling supplier inquiries (as much as 25% of an AP manager’s time can be spent taking calls from suppliers).
What are the typical challenges of traditional invoice processing?
Lost invoices
Invoices with the wrong PO number, sent to the wrong address or inbox, with the wrong supplier information creates hours of lost time.
So. Much. Paper.
Most companies still have to process archaic paper invoices. This leads to bottlenecks, missing invoices, manual data entry, and a time-consuming (and expensive) audit process when paper invoices are archived.
Manual, tedious, and redundant work
Paper-based processes mean that time is wasted on tasks like data entry instead of using that time to be strategic and proactive.
Confusion about payments
Approximately 25% of an AP Manager’s time is spent handling supplier inquiries about payments. This can be eliminated when suppliers have self-service access to their invoice process status.
Is the status quo of accounts payable really that bad?
The way we look at the accounts payable function in a business has changed. Cutting edge technology like artificial intelligence (AI), process automation, and analytics are empowering forward-thinking enterprises to transform their accounts payable department into strategic partners and even revenue centers.
Best-in-class accounts payable organizations are already using automation to their advantage and are planning for new ways to automate manual or repetitive processes to generate additional efficiencies. But of course, many accounts payable departments today struggle with outdated modes of doing business.
The top AP challenges businesses face with their AP processes include:
- High percentage of exceptions
- Invoice/payment approvals take too long
- Too much paper!
- High invoice processing costs
- Lack of visibility into invoice and payment data
The majority of AP professionals express a desire to transform their accounts payable process by moving towards digital transformation, but it doesn’t appear actually to be happening as fast as they’d like. What gives?
Most companies view AP as extremely valuable to their business, but AP professionals are having difficulty getting executive buy-in. Though the business case for automation of the accounts payable process on paper is quite straight-forward, in the real-world, it’s more complicated.
Building the business case is a unique effort for each company but thankfully, there are more than enough examples of companies of all sizes in all industries who have made the leap and are reaping the rewards.
To build a compelling argument for automation with leadership, AP automation solutions need to prove that they can provide:
- Cost savings – either through lower transactional costs or reduced FTEs
- Improved Controls and Compliance – serious stuff when you think about the liability of the CFO in a financial audit
- Lower invoice cycle times opening the door for early payment discounts
- Better data leading to informed decision making
- Less time spent (by senior management) approving invoices
Automation takes AP from reactive to proactive
AP departments are often siloed, buried under paper, slow, and disconnected. Accounts Payable often waits for handoffs from other stakeholders before processing reams of paper invoices from different business units. The result is a predictably slow invoice approval process with poor on-time payment rates.
With modern AP automation solutions, each stakeholder has a corresponding level of access and control to their invoices within the process.
By giving Suppliers, AP Managers, Cost Center Owners, Purchasers and Senior Leadership different views into the same process, the AP Team becomes much more efficient.
Ultimately, accounts payable automation allows for greater efficiency and control, translating into earlier payments, better collaboration with suppliers and procurement, and one centralized hub for a clear view of financial information and analytics.
Accounts Payable Automation becomes a competitive advantage
AP automation aims to eliminate paper from your process. When this is done, many manual or repetitive tasks can be reduced or eliminated entirely. With the goal of AP Automation being to bring as much automation as possible to the process, different stakeholders will find their tasks reduced or eliminated.
Straight-through processing means no review or approval. No invoice coding, no manual workflows, and no chasing individuals for approvals. The automation also reduces errors while raising the amount of quality data in the system. The knock-on effect is improved reporting and even predictive analytics.
On top of that, as buyer-supplier relationships are digitized, whole supply chains become more collaborative and agile.
AP automation: your strategic sidekick
Automation is like a great sidekick, doing all the work on the back end to make you a much more strategic partner to the CFO. With a modern AP automation system, reporting and analytics can take data from invoices, purchase orders, corporate spending, supplier information, and almost any electronic data source, and gives you instant access to the information you need to make strategic decisions—resulting in an immediate impact on your ability to forecast, budget, and plan.
The end-to-end digital process helps you connect with key stakeholders along the whole procure-to-pay spectrum. You’ll be able to support your peers in procurement by including suppliers to the process (as they should be). And when digitally connected, you have real-time collaborative opportunities with supplier so that you can build stronger relationships not only with your suppliers but with your procurement function.
This information allows your AP department to be a key player in the greater organization strategy. By automating menial tasks and gaining intelligent insight into spend data, AP can find a seat at the strategy table.
Not all AP automation solutions or tools are created equal
When it comes to AP automation, “electronic” is not the same as “digital“—as in a digital cloud-based software solution that is everywhere, all the time.
An AP automation solution like Tradeshift Pay, is designed with a native digital experience in mind. The goals of improved control, increased visibility and lower costs are all central to the core purpose of our platform and the commerce network it serves. Tradeshift takes a holistic approach to digitization of B2B commerce – our vision is literally to connect every company in the world and while we may have a long way to go, we are the fastest growing B2B commerce network in the world with companies in over 190 countries all connected and transacting – these are modern companies, participating in a modern world.
Tradeshift is the world’s largest cloud-based accounts payable platform. Buyers at businesses like DHL, Air France-KLM, and Volvo use our AP automation solution to settle thousands of invoices every day. Tradeshift provides a cutting-edge AP automation solution.
We've been providing AP automation for over 15 years.
Results you can expect from AP automation with Tradeshift
Day 1
Digital Transactions
99.5%
reduction in manual coding
95.8%
lower transaction costs
70%
faster invoice cycle
Advanced AI for smarter processing
- AI automates coding, matching, validation, and exception handling, reducing manual intervention by up to 99.5%.
- Customise AI settings by supplier groups, invoice types, or confidence levels to tailor automation while maintaining control.
- Track performance and accuracy through AI dashboards, comparing results with manual processes to improve efficiency, accuracy, and cost savings.
Full visibility and control over your AP
- Access real-time dashboards to monitor invoice statuses, approval workflows, and key accounts payable metrics at any stage.
- Tradeshift’s Task Manager automatically routes items to team members based on predefined rules, ensuring swift action.
- Generate customized reports with Tradeshift’s Insight Center or export data from our Data Lake for advanced analysis with your business intelligence tools.
Not all AP automation solutions are created equal
When it comes to AP automation, 'electronic' is not the same as 'digital'; as in a cloud-based, digital solution that is everywhere, all the time.
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AP Automation - FAQ
Accounts payable automation is a cloud-based software solution that reduces the amount of manual tasks involved in processing invoices giving accounts payable teams more time to spend on higher value tasks.
Accounts payable automation provides more control over the invoice handling process. Visibility and efficiency are also improved, typically yielding cost savings.
Choosing accounts payable automation empowers your organization to improve productivity, save valuable time and money, and increase collaboration due to improved access and visibility for a broader stakeholder group.
AP automation helps solve invoice and payments related communication issues by providing a singular platform that allows controlled access by different stakeholders. This access offers visibility to the process, invoice status and invoice history. In general, this access is empowering and reduces the need to ask questions when the information is more freely available.
AP automation software is cloud-based technology that automates the functions of your accounts payable team to digitize that process. Almost always, the AP solutions are paired with efforts to transition away from paper-based invoices to e-invoicing.
As of 2022, only about 9% of accounts payable departments are fully automated, but these numbers are expected to skyrocket over the next few years.
AP automation reduces your invoice processing costs in three ways. By centralizing and standardizing the invoice handling process, overhead is typically reduced. By reducing or eliminating paper invoices from your process, transactional cost savings can be achieved. Lastly, payment digitization lowers costs related to check issuing and can even yield rebates depending on the payment method.
To implement AP automation, your organization should get clear on your goals, bandwidth, and budget. Once a plan has been established and approved, choose an AP automation provider through careful research, or just call us and start a conversation.
AP automation benefits not only the accounts payable department by automating some of their more mundane tasks, but also improving relationships between procurement and suppliers due to the increased collaboration and supplier self-service options.
First, your accounts payable department should analyze their goals and budget before beginning the search for an AP automation vendor. When modernizing any process, it pays to keep an open mind to change. Making a manual process digital does not always make sense. What if you could avoid that process entirely?
