What is Automated Accounts Payable?

payroll automation

What is Automated Accounts Payable?

Accounts Payable (AP) automation takes advantage of technology to streamline accounting functions, eliminating or minimizing manual tasks and enabling enhanced transparency and visibility into financial data.


Accounts Payable is the formal business term for the money owed by an organization to its suppliers, vendors, partners, and any other entity outside of the organization. Within many larger organizations, there is an AP Department tasked with the effective management of these outbound funds. The AP function is often time-intensive, error-prone, and cumbersome, as each step requires extraordinary precision and meticulous record-keeping, combined with the implementation of Best Practices to both maintain and optimize the organization’s balance sheet and credit worthiness.


The high levels of repetition and fastidiousness mandated by AP make it an ideal candidate for automation. Starting in the 1960’s during that decades’ push for a “paperless office,” organizations sought to minimize the effort and error-potential in the AP process by implementing data lines between companies and trading partners. Invoices and purchase orders were transmitted via Electronic Data Interchange (EDI) systems in the first version of AP Automation. This method continued to dominate the AP Automation digiscape until the advent of the Internet in the 1990’s.


More than 60% of AP can be completely automated, realizing incredible savings in dollars, efficiency, and security. Automated AP utilizes digital workflows to perform duties previously required of AP staff. Invoice data is gathered digitally, either through native data files or optical character recognition (OCR) scanning or paper invoices. Functional logic determines the correct coding and invoice routing, seamless integrating robust financial data into the organization’s enterprise resource planning (ERP) systems.

This touchless approach reaps considerable benefits in cost reduction, fraud mitigation, and resource efficiency. As every step of the process is digitally optimized, there are unprecedented reporting capabilities, enabling hyper-optimized management insights. Automating AP also aids in trading partner relationships, streamlining data flow and maximizing transparency.

Learn more about the benefits of automating AP by contacting simplifiAP today.