Skip to content

The buyer's guide to AP automation for SMEs

Accounts Payable automation, also known as AP automation, streamlines and improves the processing of invoices, payments, and other financial transactions. Automation can make the accounts payable process more efficient, accurate, and cost-effective by reducing manual tasks and human error. According to independent research by Aberdeen Group, teams employing AP automation can process 4.11x as many invoices compared to a manual process. The benefits are even higher for international payments due to added complexity. Foreign exchange, complex payment instructions, regulatory compliance, and surprise fees and charges all add to the risk of manual errors, which automation can help overcome.

When executed correctly, this process will boost efficiency and benefit financial teams of all sizes. AP automation is a crucial aspect of treasury management. Businesses can save costs and better manage their cash flows when they ensure that invoices are error-free and paid on time.


The challenges of Manual AP Processing

Manual AP processing presents numerous challenges for businesses. The time-consuming nature of manual data entry can overwhelm finance teams, diverting their focus from more strategic tasks. When data is entered manually the risks of human error loom large, potentially resulting in incorrect payments or missed discounts, which can impact the company's bottom line. 

Even when payments are successfully underway, tracking and managing invoices can be a cumbersome task and lead to delays, inefficiencies, and potential disputes with suppliers. The burden of paperwork and the need for extensive virtual storage solutions create additional administrative overhead and increase the risk of misplacing or losing critical documents.

How can Small and Medium-sized Businesses benefit from AP Automation?

  • Time Savings: AP automation streamlines data capture, invoice approval and payment processing, saving time by eliminating manual tasks.

  • Cost Reduction: the automation of these timely processes minimises manual errors, unlocks early payment discounts, and reduces the need for larger storage and the costs that come with this.

  • Enhanced Visibility: Transparency is improved by real-time tracking. AP automation reports provide clear insight into invoice statuses.

  • Improved Vendor Relationships: Timely payments and effective communication strengthen relationships with suppliers. This is essential, as SME’s often depend on a select group of key suppliers or partners.

  • Scalability: AP automation systems can easily adapt and expand alongside your growing business needs.

Key Features of AP Automation Solutions

The integration of an automated solution platform with accounting software ensures a seamless flow of data between your accounts payable automation solution and your current financial systems. Invoice capture then enables the automatic extraction of data from digital and paper invoices, making manual data entry unnecessary.

Once the relevant data is collected, the Electronic Approval process can streamline the process by allowing multiple stakeholders to review and approve invoices digitally. As well as this virtual flexibility, AP automation solutions are mobile accessible, providing the flexibility to stay on top of important financial tasks even when you're away from your desk. Modern cloud-based systems offer a centralised point to coordinate, control and audit submissions and approvals with accurate user records, time-stamps and other details.

A fault-proof Payment Automation layer is a critical component of good AP automation and one of the areas where savings can be the highest, especially for global payments. Sending funds overseas is not just more time-consuming and costly but also exposes you to a great risk of erroneous payments, which can lead to high financial losses if not managed well.  Solutions that combine competitive payment and FX charges with robust technology that can handle the complexity at scale, such as HedgeFlows, can help mitigate these risks.

Analytics and Reporting provide valuable insights into your organisation's financial data, helping you understand spending patterns, evaluate vendor performance, and identify any potential bottlenecks or inefficiencies in your accounts payable processes. 


Factors to consider when choosing the right AP solution for your business:

  1. Assess your current AP processes and identify any pain points.
  2. Determine the must-have features that an AP solution will offer your business.
  3. Consider the scalability and integration capabilities of each option
  4. Evaluate vendor reputation, reviews, and customer support.
  5. Calculate the return on investment (ROI).

 A well-structured approach is essential to implementing a new AP automation solution. The first step involves thorough training of staff to familiarise them with the system and ensure a seamless transition. Once you’re up and running, it's crucial to maintain vigilance by closely monitoring the automated processes. Continuous monitoring not only ensures the system's effectiveness but also allows for adjustments and improvements when necessary, ultimately optimising the overall efficiency and accuracy of the accounts payable workflow.


The significance of AP automation for small and medium-sized businesses cannot be overstated, as it offers a range of benefits from time and cost savings to improved vendor relationships and enhanced scalability. 

As the business landscape evolves, businesses need to embrace modern solutions like AP automation to ensure efficiency and foster sustainable growth. Embracing these innovative technologies is the key to remaining agile, adaptable, and thriving in the contemporary business world.

HedgeFlows offers seamless integration with your accounting system to efficiently handle both domestic and international payables in a single, error-free operation. Whether it's a two-way system connection or file uploads, our streamlined approval and payment procedures will help you save time and cut costs.

Get in touch to learn more.