17 Accounts Payable Automation Best Practices

Most AP automation systems deliver clear wins: faster processing, fewer errors, and better visibility. But the difference between good and great results often comes down to how you implement and optimize your system. 

In this article, we present 17 AP automation best practices every AP Manager and finance team needs to know. These strategies can help you achieve best-in-class efficiency, getting your invoice processing cost down to just $2.81 per invoice. 

Before we get into the best practices, let's get clear on what AP automation actually is.

What is AP Automation? 

AP automation replaces manual invoice and payment tasks with digital workflows. Instead of printing invoices, chasing approvals through email, and printing checks, your system works differently. It captures invoice data, routes it to the right people, and executes payments. This all happens with minimal human intervention.

At its core, AP automation handles four functions:

• Collecting invoice data without manual typing

• Getting approvals from the right people automatically

• Securing payment authorizations with less hassle

• Sending payments however you prefer to pay vendors

Most importantly, the best AP software solutions integrate directly with your accounting system. This eliminates duplicate data entry while keeping your existing controls and approval processes intact.

Note: We’ve grouped the following best practices around common AP pain points: preventing errors and bottlenecks, solving human-related issues, and providing better insights for decision-making. Feel free to jump straight to the section that’s most relevant to your team right now.

Here are the 17 must-know AP automation best practices for 2025: 

Prevent Errors & Bottlenecks  

Even the best AP automation needs safeguards to prevent mistakes and workflow jams. The following strategies help you identify potential problems early, establish consistent processing methods, and create smoother workflows for invoices from intake to payment. Each approach targets a different potential weak point in your AP process.

1. Centralize Invoice Intake Digitally

Route all invoices through one digital intake system, regardless of how they arrive. This creates consistency in processing and tracking.

In Practice: Set up a system to scan paper invoices, forward emailed invoices, and import electronic invoices directly. Then, route them all into the same processing queue. Tell vendors to send invoices to one email address or portal. This keeps invoices from piling up in individual inboxes or on desks.

2. Auto-Categorize Exceptions with AI

Use software that can automatically group similar exceptions together and suggest solutions based on past resolutions.

In AP processing, exceptions are invoices that don't follow standard rules and need manual handling. These might include missing PO numbers, price mismatches, or approval delays that block automatic processing. Without proper management, these exceptions can quickly create bottlenecks in your workflow.

In Practice: Look for AP automation tools with machine learning capabilities that improve over time. These systems can identify patterns like "This vendor typically forgets the PO number" or "This approver typically questions freight charges." The system should suggest resolutions based on how similar issues were handled before. 

3. Pre-Screen Vendor Compatibility

Check if new vendors can work with your automation needs before you start doing business with them. This prevents future headaches.

In Practice: Create a short vendor questionnaire about their invoice format (PDF, EDI 810, XML) and whether they include PO numbers. Ask how they handle corrections too. Make this part of your vendor setup process and flag vendors who might cause issues with your automated system.

4. Automate Invoice Matching (Two-Way and Three-Way Matching)

Configure your system to automatically match invoices with purchase orders and receiving documents. This catches discrepancies early in the process and prevents payment errors.

Invoice matching comes in two main forms. Two-way matching compares invoices against purchase orders to verify that pricing, quantities, and terms align with what was originally ordered. Three-way matching adds an extra layer of verification by including the receiving report, confirming not only what was ordered but also that everything was actually received before payment approval.

In Practice: Configure your automation to flag any invoice where the quantities, prices, or terms don't match the original PO or receiving documents. Start with two-way matching (invoice to PO) if three-way is too complex initially. The system should only route perfectly matched invoices for payment and send exceptions to a specialist. 

5. Track Issues with Problem-Source Tracking

Keep track of which vendors, departments, or individuals consistently cause exceptions. This helps you focus your improvement efforts where they'll have the biggest impact.

In Practice: Generate a monthly report showing which sources are responsible for the most exceptions. This tool is not for punishing people but for identifying training needs or process gaps. Share this information privately with department heads, not the whole company. You might find that 80% of your exceptions come from just 20% of your vendors or approvers.

6. Validate Automation with Shadow Reporting

Create reports that verify your automation is working correctly. This lets you catch errors before they become bigger problems.

In Practice: Set up weekly reports that check for things like duplicate payments, unusual approval times, or missing documents. Compare expected outcomes with actual results. For example, if all invoices over $10,000 should have two approvers, run a report to confirm this is happening. This type of verification has helped many AP teams catch system configuration errors that would have bypassed approval matrices for certain vendors.

Fix the Human Side of Automation

Technology is only half the AP automation equation. People make the system work. These strategies focus on the human elements that can make or break your automation success, from streamlining approvals to building better cross-department relationships. Addressing these often-overlooked factors will help you achieve higher adoption rates and smoother processing.

7. Escalate Approvals Strategically

Build an escalating notification system that becomes more direct as approvals become more overdue. This adds a bit of social pressure without sparking conflict.

In Practice: Start with friendly reminders, then move to daily alerts, and finally, send notifications that copy their manager after a set period. One approach we’ve seen work is using increasingly direct subject lines: "Quick reminder about pending invoice" → "Invoice approval now 5 days overdue" → "URGENT: Invoice approval causing payment delay."

8. Conduct Regular Exception Review Sessions

Set up a regular time slot where approvers can join a video call to quickly handle multiple invoice questions or exceptions at once, rather than chasing people through email.

In Practice: If you’re handling many invoice exceptions, a 30-minute slot twice a week may work well for your teams. Have the invoice details ready to share on screen and make decisions in real-time. Record these sessions for those who miss them.

9. Appoint a Dedicated AP Process Manager

Have someone responsible for maintaining documentation of all your AP processes, automation rules, and exceptions. This establishes an institutional memory that survives employee turnover.

In Practice: This person should keep a searchable repository of process documents, decision trees, and training materials. They should update this library whenever processes change. Consider using a simple wiki with video tutorials for complex processes. When new team members join, this resource significantly reduces training time.

10. Tailor Automation with Vendor Personas

Group your vendors based on their behaviors and needs. This helps you tailor automation rules that work better for each type of vendor instead of using one-size-fits-all settings.

In Practice: Start by looking at your top 20 vendors by volume and identify patterns. Some vendors might always send perfect invoices while others consistently make the same mistakes. Establish 3-5 personas (like "High-Volume/Low-Error" or "Complex Billing/Multiple POs") and assign vendors to each group. Then build specific automation paths for each persona.

11. Strengthen AP and IT Collaboration

Develop good working relationships with IT staff before you have urgent problems. This makes it easier to get help when your automation hits technical issues.

In Practice: Invite IT to quarterly lunch-and-learns about your AP processes. Explain how critical their support is to your payment operations. When you need emergency help, you'll have allies who understand your work. We’ve found that bringing donuts and taking genuine interest in their challenges goes a long way.

12. Regularly Assess Automation Impact

Regularly check if your automation is creating new problems or burnout for your team. Even successful automation can have unexpected consequences.

In Practice: Schedule a quarterly meeting where team members can safely discuss what's not working well. Ask questions like: "What tasks feel more complicated now?" or "Where are we spending more time than before?" 

Sometimes automation shifts work rather than eliminates it, and you need to adjust. For example, OCR systems might create new work when team members spend significant time correcting small extraction errors. The solution is to reconfigure these systems to flag only meaningful discrepancies.

Drive Better Decisions with Real Insight

Your AP automation captures valuable information with every invoice it processes. These approaches help you use that data to improve how you manage cash, communicate with vendors, and work with other departments. Instead of just paying bills faster, you'll learn to spot trends, fix recurring problems, and make smarter decisions about when and how to pay

13. Optimize Payment Runs for Cash Flow

Time your payment runs based on actual cash flow patterns rather than arbitrary schedules. This optimizes working capital and vendor relationships.

In Practice: Work with Finance to understand cash inflow patterns and align payment runs accordingly. Use early payment discounts when cash position is strong, and utilize full payment terms when needed. Create a dynamic payment calendar that adapts to business cycles rather than running payments on the same days every month. 

14. Streamline Vendor Communication Using AI

Use AI writing tools (Like ChatGPT, Gemini, or Claude) to draft responses to common vendor questions and invoice issues. This saves time while keeping communications professional.

In Practice: Design templates for common scenarios like missing information requests or payment status updates. AI tools can help personalize these messages while maintaining consistency. Start by identifying your 10 most common vendor communications and design smart templates for each. This cuts response time dramatically while ensuring all necessary information is included.

15. Analyze Exceptions as Stories

Look at exception patterns as stories that reveal process problems, not just as individual errors to fix. Putting this process information in a story makes it easier for team members to learn and remember.

In Practice: In your monthly meeting, pick the top 3 exceptions and track them from beginning to end. Ask: "Why did this happen? Where did the process break down?" Often, you'll find that what looks like a vendor error actually started with unclear requirements from your team. Produce a simple one-page summary of each "story" with action items.

16. Create a Self-Service Learning Portal

Move beyond one-time training sessions to a resource that people can access whenever they need help with the AP system.

In Practice: Build a simple internal website with short how-to videos, step-by-step guides, and FAQs. Include sections for approvers, vendors, and AP staff. Make sure it's searchable and update it regularly. An example of content could be the "Top 5 Approval Mistakes" guide or a 2-minute video on reading the invoice dashboard.

17. Establish Cross-Department SLAs

Craft clear agreements about how quickly each department needs to handle their part of the invoice process. This establishes accountability and helps identify bottlenecks.

In Practice: Work with each department to establish reasonable timeframes. Example processing time agreements may be: 

• AP will process clean invoices within 2 days

• Approvers must respond within 3 days

• Finance will release payments every Tuesday and Friday 

Track performance against these metrics and review quarterly. When people know what's expected, they're more likely to meet deadlines.

Make Corpay’s AP Automation Software Work For You

AP departments face real challenges every day. Vendors send inconsistent invoices. Approvers create bottlenecks. Manual processes waste valuable time.

The best practices we've explored directly address these pain points.

Creating vendor personas helps you design payment processes that work for different supplier behaviors. Regular video check-ins keep approvals moving without endless email chains. Problem-source tracking shows which processes cause the most headaches so you can fix what matters most. Building relationships with IT ensures you have technical support before emergencies happen.

These approaches recognize business reality instead of assuming perfect scenarios. Your vendors have different needs. Approvers get busy. Unexpected issues pop up.

Corpay's AP Automation makes these best practices easy to implement. Our platform streamlines your digital invoice intake through a centralized system. It provides AI-powered exception handling that learns from your patterns. You can create custom workflows based on vendor types, just like the personas we discussed. Our payment optimization tools let you maximize cash flow and capture rebates automatically.

With Corpay, you'll cut processing costs by up to 80% while earning rebates on payments you're already making. Transform these best practices into real results that power your accounts payable to the next level of efficiency.

AP Automation Best Practice FAQs

What is the biggest benefit of AP automation for most companies?

The biggest benefit of AP automation is the dramatic reduction in manual processing time. Most companies find their AP team can handle significantly higher invoice volumes without adding staff.

Can AP automation work with our existing accounting system?

Yes, modern AP automation solutions are designed to integrate with virtually all major accounting and ERP systems. This is a key feature to look for when selecting a solution.

Corpay's AP automation integrates seamlessly with popular systems through secure API connections. The best solutions preserve your existing approval workflows and controls while eliminating duplicate data entry.

How does AP automation handle exceptions and special cases?

AP automation systems use rules-based workflows to identify and route exceptions to the right people. When an invoice doesn't match its purchase order or needs special approval, the system flags it automatically.

The best systems learn from how exceptions are handled over time. For example, Corpay's solution can recognize patterns like certain vendors consistently forgetting PO numbers and suggest appropriate actions based on past resolutions.

Will vendors need to change how they send invoices?

No, vendors typically don't need to change their invoice delivery methods. Good AP automation systems can handle invoices in multiple formats.

Paper invoices can be scanned, emailed PDFs can be imported, and electronic invoices can flow directly into the system. The key is having one central intake point where all invoices enter your workflow, regardless of their original format.

How difficult is it to implement AP automation?

Implementation complexity depends on your current processes and systems, but most companies find it straightforward with the right partner. The key is working with a provider that offers strong implementation support.

Corpay guides customers through a structured implementation process that includes system setup, workflow configuration, integration testing, and user training. Most companies can be up and running with basic functionality in just a few weeks, with advanced features phased in over time.