Before You Start

This guide assumes familiarity with vendor management and bill approval processes within your organization.

Overview

40 min
Setup Time
Advanced
Difficulty
Weekly
Maintenance

What You’ll Learn

  • How to choose the right AP automation tools
  • Setting up efficient approval workflows
  • Optimizing vendor management for automation
  • Implementing paperless invoice processing
  • Integrating with QuickBooks or Xero for GL entry

1. Preparation Steps

Before selecting software, define your current AP process and requirements:

Key AP Automation Features

  • Invoice capture (OCR, email parsing)
  • Customizable approval workflows
  • Vendor portal for self-service
  • Payment processing capabilities

Recommended Integration Points

  • General Ledger (QuickBooks, Xero)
  • Expense Management (Expensify, Concur)
  • Procurement (Purchase order matching)
  • Bank accounts for payment execution

2. Choosing Your AP Strategy

You have two main approaches, each with different levels of automation.

Method A: Basic Accounting Software + Manual

Leveraging built-in features of QuickBooks/Xero, supplemented with manual steps.

Pros:
  • Low initial cost.
  • Familiar interface.
  • Good for very small volume.
Cons:
  • Limited automation.
  • Manual data entry risk.
  • Complex approvals difficult.

Method B: Dedicated AP Automation Software

Specialized platforms designed for end-to-end AP automation.

Expert Tip: For true efficiency and scalability, we strongly recommend investing in a dedicated AP automation platform. These tools streamline invoice processing, enforce approval policies, and offer comprehensive reporting, significantly reducing manual effort and errors.

3. Step-by-Step: Implementing AP Automation

Here is the high-level workflow for a clean setup.

Here is a sample code block to show how an API call might look for an invoice.

{
  "invoice_id": "INV-2025-001",
  "vendor_name": "Books Automator Inc.",
  "invoice_date": "2025-10-20",
  "due_date": "2025-11-20",
  "total_amount": 1250.75,
  "currency": "USD",
  "line_items": [
    { 
      "description": "Consulting Services",
      "quantity": 1,
      "unit_price": 1000.00,
      "account_code": "6000 - Consulting Expenses"
    },
    {
      "description": "Software License",
      "quantity": 1,
      "unit_price": 250.75,
      "account_code": "7000 - Software Subscriptions"
    }
  ],
  "status": "Pending Approval"
}

4. Setting Up Your AP Automation Solution

  1. 1

    Select and Integrate Software

    Choose an AP automation solution (e.g., Bill.com, Stampli) and integrate it with your accounting system (QuickBooks, Xero).

  2. 2

    Configure Vendor Master Data

    Import or create vendor profiles, ensuring complete details like payment terms, addresses, and GL default accounts.

  3. 3

    Define Approval Workflows

    Set up rules for invoice approvals based on amount, vendor, department, or GL account. Assign approvers and notification settings.

  4. 4

    Automate Invoice Capture & GL Coding

    Utilize OCR and AI features for automatic invoice data extraction and initial GL account coding. Set up templates for recurring invoices.

Common Error: Incomplete Vendor Data

Ensure all vendor information, especially payment details and default GL accounts, is accurate and complete. Incomplete data often causes payment delays or reconciliation issues.

5. Testing Your Setup

AP Automation Test Checklist

  • Process a test invoice through the system
  • Verify approval routing and notifications work correctly
  • Confirm GL coding and dimensions are accurate
  • Track payment execution and ensure it’s recorded in accounting software
  • Review audit trails for completeness

Need Help?

Get Support

Having trouble implementing or optimizing your AP automation? Our experts can assist with strategy and setup.

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