AP Automation

A Seven-Step Guide to Paperless Accounts Payable

If you want to join this account payable revolution but are unsure where to start, stick around for a step-by-step guide to help you transition.
Hilda Bahringer


Accounts payable employees pride themselves on their filing systems, ability to handle large volumes of paperwork, and efficient capturing of monthly invoices.  

No one will dispute that they have earned their right to brag, but the truth is this method of working is no longer effective. Technological advancements are forcing a change, and we can either resist or go along with it.  

Many companies have decided to go along with it. Since 2020, 70% of accounts payable (AP) departments have converted to a paperless system, and this number is increasing [1]

If you want to join this account payable revolution but are unsure where to start, stick around for a step-by-step guide to help you transition.

Challenges of the current paper-driven system

The task of converting your accounts payable department over to a paperless system may seem daunting but staying in the current pitfalls of a paper-driven system is worse.  Here are just some of the headaches of AP:

  • Long working hours processing paper invoices
  • Endless searching for documentation to answer queries
  • Duplicate payments
  • Handling and filing of paper invoices
  • Writing and mailing of paper checks
  • Storage space for filing systems

56% of businesses said that invoices were sent to the wrong place and 36% were concerned with late payments due to process delays [2]

The manual payment process can have up to nine steps, whereas an automated process has five steps. 

- Example of a paperless Accounts Payable process

#1 Invoice received from the supplier

#2 Auto population of electronic form

#3 Invoice approval form routed to relevant authorization level, a digital signature used

#5 Confirmation emailed directly to supplier

#6 Digital payment made at scheduled time

Implementing a paperless accounts payable system

The only way to overcome these challenges is to allow technology to take the difficulty out of the process. Let’s look at how you can do this in no time. 

#1 Find out what’s not working

Converting from a manual process to a paperless one requires the business to map the desired AP workflow.  Any gaps that currently exist will need to be addressed. 

One meeting to map out all the AP processes and agree on the objectives of a paperless system may be all that is needed.  This is not a step you should skip, as it will reveal issues that could cause problems later on.

Bring together the most experienced AP staff and those who can authorize changes to the workflow.  This will facilitate a faster change process.

Some automation software will have pre-defined workflow templates.  Choose software that fits well with your current process and reduce the need for customization, as this increases costs.

#2 Get trusted, forward-thinking employees involved

Source: Pexels

Going paperless can be challenging, and the success of the transition will depend on what is called change agents or process champions.  These people are excited by the prospect of paperless AP and can influence the accounts payable department to embrace the changes.

Employees working with the processes daily that have the company’s interests at heart can be invaluable in managing the process within the department.  They will see the benefits long before the others and anticipate what is needed and how they can be involved.  

- Buy-in from the next layer of accounting staff

Once the change champions are on board, the accounts payable team can get involved.  The point is to do this after the new process is mapped out and authorization is obtained.  

Share the challenges of the current system and the benefit of the change. The majority will likely agree a change is needed.  However, affected employees, such as data capturers and filing clerks, will have valid concerns to discuss. 

These employees will be important in moving all paper invoices and other documentation to paperless, so their buy-in is key.

#3 Review automation software systems

An automated system is an investment.  You need to spend time reviewing software for the functions that it has so that it supports your AP processes. Some primary areas on which to concentrate:

- Invoice Management

By using technology such as AI, image recognition and machine learning, automation software can electronically capture, digitize and store invoice information. This data filters through every aspect of the process, preventing duplicate or missing information.

Payment deadline notifications and checks for missing information must be part of the functions of the automation software.  This will improve payment turnaround times and eliminate invoice backlog.

Automatic approval allows documents to be accessed, electronically approved and sent for payment.  This improves the efficiency of payments.

Source: Pexels

AP software with the ability to track where invoices are in the process is key.  AP employees who can give real-time answers to suppliers have found it builds trust and helps the vendor relationship.

Payvy provides automated processing of invoices using AI technology

- Integration with accounting software

To enable a reduction in manual processing costs, integration with existing accounting software should be part of your decision.  Steer clear from software that requires brand new systems to be brought to enable the system to work together.

Most automation software can easily integrate with popular accounting options such as Xero and QuickBooks.  The software should draw information about suppliers and previous invoices from your accounting system. 

- Access controls

Settings in the software must allow you to set who can initiate and control AP workflows and who can view and submit payments.    Simple and easy to understand approval workflows are a component of well written automation software.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

- Detailed reports

The aim is to use detailed accounts payable data to improve cash flow management.  The automation software that has quick access to data via a dashboard is vital for drawing real-time reports and monitoring cash flow as the financial situation changes.

Payvy provides a user friendly and intuitive dashboard that will give you real-time information at your fingertips

- Look at good and bad reviews of the product

Read written reviews of the software by verified customers.  Trust is a critical element in choosing a service provider, so blind or anonymous reviews are not reliable.

Keep an eye out for elements in the reviews that tell you about customer relationships and how the software has improved business processes and saved costs. After-sales service support reviews will show how committed the provider is to their customers.

#4 Plan every step of your implementation plan

Document the implementation in an easy-to-understand way and put deadlines and responsible persons into the plan.  Stakeholders will appreciate a systematic way of making the transition to paperless AP. .

Meetings with automation companies, affected employees and key outcomes should form part of the plan.

- Budget 

Cost saving provides a good incentive for going paperless.  However, the upfront costs of converting to an automated system will have an impact financially.  To avoid disappointments in the later stages of the transition, approve finances for the project upfront.

Source: Pexels

#5 Convert paper documentation to electronic format

 A paperless invoice processing system eliminates paper documents that require space and a filing system. Human error can easily creep into these systems and cause problems with retrieval.  

Document scanning provides the basis of a digital document storage system saving on operational costs.

#6 Train employees on new processes

Paper processes are time-consuming, but employees get used to them and a new system may seem intimidating.  Most automation software companies will provide basic training to acquaint accounts payable teams with the program.  

Employees need time to familiarise themselves with new processes, and patience is key.  Providing manuals or electronic resources empowers employees to troubleshoot problems.

#7 Hold weekly meetings to tackle implementation problems

Gather process champions, management and the accounts payable department weekly.  This should be done for at least the first two months of using the new paper processes.

The aim of these meetings is to discuss user difficulties, information not appearing on financial reports, storage and retrieval of electronic documents and confusion around the approvals process.

These meetings will encourage stakeholders to tackle issues quickly. Discuss the success of the implementation to encourage the AP department.

The benefits of a paperless accounts payable process

If that’s not already appealing, here are some additional reasons to convert to paperless accounts.

  1. The use of printers, copiers, fax machines and paper will be greatly reduced
  2. Financial reports will contain real-time information.  This has a great influence on decisions made that affect the cash flow
  3. More payments will be processed daily, reducing the need for manpower. This will empower employees to track cash flow problems earlier
  4. With a vendor portal, suppliers can view how far their invoice is in the accounts payable process.  This will improve vendor relationships.
  5. Increased efficiency, which cuts down on duplicate work, error correction, reversal of payments, and manual compilation of reports.
  6. Enables remote invoice processing and approval
  7. Storage costs are cut down because everything is kept electronically

With Payvy, vendor management becomes easy and reliable with multiple payment methods and a simple way to communicate through the app.


Poorly managed, AP automation causes more problems than it solves. It can result in payment errors which harm vendor relationships. The time it takes to correct these errors will harm the finances of the business and contradict the reasons for the automation.

Regardless, 83% of accounting executives and business owners feel that to retain a competitive edge, they need to adopt a paperless culture and convert to technology-driven AP processes.  That’s saying something. 

Moving a business from one point to the next requires good processes, the cooperation of people and excellent technology.  

In this article, we’ve covered them all in the hope that you’ll embrace the challenge of moving into automation and leave the pains of manual account payable behind.


[1] https://webinarcare.com

[2] https://www.plateiq.com

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