Choosing the Right AP Automation Software: A Comprehensive Guide

Manual, paper-based AP (accounts payable) workflows can feel like a never-ending stream of invoices, approvals and payments and, for many businesses, working this way is no longer sustainable. The good news is that with AP automation tools, businesses can streamline their workflow, free up valuable time, improve accuracy and achieve better financial visibility.

But, with so many options available, how do you choose the right AP automation software for your business?

To make an informed decision, you need to understand which provider and solution makes the most sense for your company, the unique challenges you face and the strategic goals you’re setting for the future.

In this comprehensive guide, we’ll take you through the key considerations so you can choose an AP automation solution with confidence.

Why AP automation matters

Your accounts payable automation project must be designed to meet organizational, economic and regulatory goals, resulting in a number of benefits for your organization. Some we’ve listed here:

Eliminate manual processes

Traditional AP workflows rely on manual data entry which, all too often, is slow, error-prone and a drain on time and resources. AP automation removes much of the repetitive manual work from these tasks, making the process smoother, faster and more accurate.

Better visibility and control

Automation provides real-time insights into your AP processes, so you know exactly where your invoices stand. Easily track invoice status, identify bottlenecks and ensure timely payments to vendors, without the need for chasing approvals or searching for lost documents.

Save time and money

By reducing manual work and errors, AP automation helps you lower operational costs and focus on what really matters: growing your business. Businesses can reduce invoice processing costs by up to 80% with the right AP automation tool.

How to choose the right automation software

Assess your business requirements

To choose the best AP automation software for your organization, start by assessing your specific requirements. The needs of businesses vary depending on factors such as their size, industry and operational complexity. A small business, for example, may prioritize cost-effectiveness and ROI, whereas a larger global corporation will need more advanced features.

The first question you should ask yourself is: “will the solution allow us to meet our short- and medium-term business objectives?”

Take a close look at your current AP workflow and consider:

  • How many invoices do we process each month?
  • What are the biggest pain points in our current process?
  • Who is involved in invoice approvals and payments?
  • Are there any bottlenecks or inefficiencies in the current process?
  • How complex are our current processes?

Understanding your needs will help you identify which features are essential for your business.

Key features of top AP automation software

Once you have a good understanding of your business needs, you can start researching the products that meet those needs.

Leading AP automation software solutions offer a variety of features to enhance the efficiency and accuracy of your AP workflow. Here are some must-have features to look out for:

  • Ability to connect to all your suppliers from the largest multi-national to the smallest companies.
  • Multiple invoice submission methods that are simple to use, free and cover the needs of your supplier base, helping to maximize adoption rate.
  • Automated routing, coding and approval of invoices, including complex cases, such as invoices with several order numbers, recurring invoices and split coding.
  • Superior matching capabilities using any combination of invoices, POs, goods receipts, contracts, etc. at the header or line level.
  • Automated coding for both PO and non-PO based invoices including recurring invoices.
  • Ability to standardize the process while being flexible and open to adjust multiple information systems and characteristics.
  • Collaborative features for internal purposes as well as the ability to liaise with suppliers throughout the process.
  • Analytics and dashboards for full visibility of financial data across the company and on a granular level for efficient strategic and operational control.

Integration capabilities

For seamless operation, your AP software should work alongside your existing accounting or ERP systems. Successful integration ensures smooth data flow, reduces the need for manual data entry and eliminates the risk of discrepancies between systems.

When choosing AP automation software, consider how well it will integrate into your current systems. If, for example, your business relies on niche systems, ensure your chosen software can accommodate custom integration through APIs or middleware solutions.

User experience

If you want to ensure high adoption rates and stakeholder satisfaction, then user experience and accessibility are key. After all, even the best AP software won’t deliver value to your organization if it’s difficult to use, so keep the following in mind:

  • Is the interface intuitive and user-friendly? Your team shouldn’t need weeks of training to get started.
  • Does the software offer accessibility features? Mobile access, cloud-based operations and multi-user support allow for flexibility in how and where your team can manage accounts payable tasks.
  • Does the vendor offer training and support? On-boarding resources, training videos and responsive support can make a huge difference.

Scalability and future-proofing

When choosing AP automation software, it’s important to think about your future needs. Will the software evolve with your business as it grows?

Look for a solution that can handle increased volumes, allow you to add more users as your business expands, adapt to new businesses processes and keep up with technological advancements and regulatory changes.

Cost analysis and ROI

Cost and budget are essential factors in any decision. But sacrificing what you need solely based on the price tag will prove more costly in the long run.

Companies that make decisions based on cost often find themselves struggling after the implementation of the cheaper solution, then removing the inefficient solution and starting the process all over again. Instead, the key figure to look at is return on investment (ROI).

So don’t prioritize the cost of the solution over the value it can deliver – determine ROI and use that figure to make your decision.

Of course, calculating the ROI of AP automation isn’t always straightforward and there are several points to consider, including:

Financial ROI

The specific numbers will depend on factors such as the industry your business operates in, the amount you invoice each month and how much you currently spend on the process. Financial factors to consider include:

  • Reduced invoicing processing costs
  • Reduced losses due to human error
  • Fewer supplier enquiries
  • Increase in on-time payment performance
  • Time savings
  • Increased capture of early payment discounts
  • Reduced staffing costs

Non-financial ROI

As well as financial ROI, you should also consider non-financial factors, including:

  • Increased control
  • Streamlined processes
  • Easy auditing
  • Optimized business relationships
  • Employee satisfaction

Considering all the above factors and their financial implications will help you calculate the potential ROI AP automation software could offer for your organization.

Reporting and analytics

Choose software that provides clear, real-time insights into your AP processes. This will help you identify trends, monitor performance and make smarter financial decisions. Features such as customizable dashboards and visual reports will make it easy to monitor KPIs, including invoice processing time and on-time payment rates.

Vendor support and community

Customer support can make all the difference. When evaluating vendors, ask:

  • What support options do they offer?
  • When are their support hours?
  • Do they have a knowledge base of resources to help troubleshoot issues?
  • Do they provide onboarding support to ensure a smooth transition?

Consider the type of partner you want to support your business now and in the future.

Real-world case studies and testimonials

Don’t just take the vendor’s word for it – as part of your evaluation process, check out reviews, case studies and testimonials to see what other businesses have to say about their real-world experiences with the software.

Look for businesses similar to yours to see how the software has worked in practice, including the challenges faced by a business and how the software overcame them.

Security and compliance

Security and compliance are non-negotiable when it comes to financial data. Make sure the software you’re considering:

  • Complies with industry standards
  • Offers robust data encryption
  • Features user access controls to protect sensitive information
  • Tracks changes and approvals with an audit trail to ensure accountability

As well as the above, check that the software supports compliance with tax regulations and electronic invoicing standards locally.

Making the decision: Selecting the right AP automation software

Choosing the right AP automation software might seem overwhelming, but by following the steps outlined above, you’ll make the best decision for your business. Remember to prioritize features that solve your biggest pain points and don’t be afraid to ask questions.

With the right software in place, you’ll transform your AP processes, freeing up valuable time and setting your business up for success.

At Basware, we have guided customers through thousands of AP automation projects and helped many organizations navigate the sometimes arduous task of getting buy-in from all stakeholders.

Now is a critical turning point in much of the business world, where companies must embrace AP automation as part of their technology landscape or be left behind. As the industry’s leading AP automation provider, Basware will help you drive transformation in your business with intelligent, invoice-centric AI for your entire invoice lifecycle.

Book a consultation call with our solutions experts to discuss the benefits of Basware’s AP automation solutions.