Accounts payable (AP) automation is transforming how modern finance teams operate. By streamlining mundane, repetitive tasks, AP automation enables staff to focus on more strategic initiatives that drive business value.
Leading research firm Ardent Partners projects that AP automation could help companies:
- Lower per invoice costs by 80%
- Decrease invoices‘ days sales outstanding (DSO) by 50%
- Accelerate the invoice process by 75%
But how are real-world businesses actually leveraging AP automation to achieve these kinds of results? This article analyzes 20 AP automation case studies across industries to showcase the tangible benefits companies are gaining.
Size of the AP Automation Market
The global market for AP automation solutions reached $2.3 billion in 2021 according to research from Mordor Intelligence. Driven by maturing technologies and proven use cases, the market is projected to grow at an impressive CAGR of over 11% from 2022-2027.
North America leads adoption, holding a market share approaching 40% as of 2021. But AP automation usage is rising across all regions as firms aim to streamline processes, reduce costs, and leverage emerging technologies.
Key Benefits of AP Automation
After examining the 20 real-world examples, several key benefits emerged as the most common outcomes of AP automation projects:
1. Increased Efficiency
By automatically capturing, validating, routing, and approving invoice data, AP automation significantly accelerates financial workflows. Teams handle more invoices in less time, with less manual work required.
For example, railway company Angel Trains was able to resolve numerous issues related to VAT invoices and adapt its platform to support multiple languages. Overall, it enhanced accountancy productivity and efficiency.
2. Faster Payments & Improved Cashflow
AP automation gives companies far greater visibility into incoming invoices and when payments are due. This enables faster payments to vendors, avoiding late fees and benefitting from early payment discounts.
The Master Trust Bank of Japan reduced invoice processing time from 5 minutes to just 50 seconds per document through automation. This dramatic acceleration enabled much faster payments.
3. Cost Savings
By reducing manual invoice processing costs by up to 80%, AP automation delivers tremendous cost reduction opportunities. Teams can be streamlined through attrition or re-allocated to higher-value tasks.
Outsourcing firm Capita saved £1 million annually by needing 50% less office staff to manage its invoice processes after implementing automation.
4. Enhanced Visibility & Reporting
Modern AP automation platforms provide real-time dashboards, notifications, analytics and reports on all invoices and payments. This gives finance leaders far greater insight into cash flow, disputes, fraud, duplicate payments and other critical factors.
For example, civil engineering leader Colas in France gained much more visibility into its AP processes through automation, enabling better decision making.
5. Reduced Risk
AP automation minimizes common issues like duplicate invoice payments and fraud which are endemic to manual processes. This reduces financial leakage and risk across the system.
UK electrical supplies distributor KEW found that the rates of duplicate payments and fraud fell dramatically after adopting automation, leading to major cost savings.
Change Management Best Practices
While the technological implementation of AP automation may seem straightforward, realizing the full benefits requires careful change management across the finance organization. Here are 5 best practice tips:
1. Get executive buy-in – Having visible support from senior leadership helps drive engagement.
2. Train staff on the new system – Hands-on training smooths the learning curve and eases uncertainty.
3. Involve staff in the process – Encourage participation in requirements planning and vendor selection.
4. Phase-in implementation – Start with a limited scope before organization-wide roll-out.
5. Communicate progress – Share success metrics and user feedback frequently.
Properly managing the human side of AP automation is crucial for long-term success.
Fraud & Compliance Opportunities
AP automation doesn‘t just accelerate workflows – it also minimizes financial risks in key areas:
Duplicate Payments – Automating matching of invoices, purchase orders and contracts prevents double-pays.
Fake Invoices – Fraud detection tools identify suspicious invoices before payment.
Compliance Violations – System rules ensure invoices meet trade, legal and regulatory policies.
In one striking example, UK firm KEW Electrical found automation reduced its rates of both fraud and duplicate payments substantially.
AP Automation Case Studies By Industry
To provide ideas and benchmarks for finance teams across different industries, here is an analysis of real-world AP automation use cases by sector:
Manufacturing
Blue Star, an Indian manufacturer of air conditioning and refrigeration equipment, improved its invoice processing time by 33% while also boosting AP efficiency by 70%. Meanwhile, automation enabled a 98% increase in vendor payment requests handled.
Similarly, Japanese electronics giant Mitsubishi Electric accelerated coding and approval workflows through automation. 90% of its invoices are now processed with no human intervention.
Retail & CPG
German grocery retail chain Lidl automated over 70% of its invoices, enabling much faster processing. It also achieved invoice reading accuracy above 95%, minimizing errors.
For global brewer Molson Coors, automation reduced invoice processing time 76% while also cutting approval time per document to just 17 seconds.
Healthcare
Oxford Health NHS Foundation Trust in the UK estimates that AP automation delivered time savings equivalent to the effort of 16 full-time employees in one year. It also captured early payment discounts from suppliers to maximize value.
Financial Services
The Master Trust Bank of Japan slashed the manual workload involved in statement processing by 75% after adopting AI-driven automation for document handling.
For major UK investment manager Schroders, automation delivered over 300% in cost savings while also reducing invoice processing times from 10 days down to just 3.
Technology
US cloud hardware provider Cypress Creek saw a 98% boost in accuracy of vendor invoices after implementing automation. Invoice data is now seamlessly matched to corresponding purchase orders.
Transportation
Global transport and logistics giant XPO Logistics processes over 19,000 invoices per day. By automating data capture and routing, it was able to reassign 150 AP staff to more value-add analysis.
Higher Education
Leading UK university Imperial College London streamlined invoice processing by 90% through automation. It also gained visibility into 57,000 invoices per year that were previously managed manually.
Staff productivity in the finance office improved by over 40% as tedious data entry was eliminated. Training junior staff was also accelerated with the new automated system.
Emerging AP Automation Use Cases
While most firms focus initial automation efforts on core capabilities like invoice data capture and transactional matching, innovative organizations are also piloting more advanced use cases:
Blockchain Validation – A shared, immutable blockchain ledger can verify if an invoice has already been paid to prevent double-pays and fraud across partner networks.
Crowdsourced Auditing – Submitting samples of digitized invoices to an external crowd for classification checks can enhance quality assurance.
Predictive Forecasting – AP automation data feeds advanced analytics models for more accurate cash flow, risk and budget projections.
Self-Healing Transactions – Machine learning algorithms identify and automatically resolve processing errors without human intervention.
These cutting-edge applications demonstrate the wider digital transformation potential unlocked by AP automation across the enterprise.
Technical Considerations
While modern AP automation solutions allow non-technical business users to handle most day-to-day management, IT leaders still face some key decisions:
Cloud vs. On-Prem Deployment – Multi-tenant SaaS platforms offer faster rollout but some firms prefer keeping sensitive financial data on-premises.
API & Infrastructure Integration – Existing accounting, ERP, procurement and other systems may require tight integration.
Compliance & Security – Especially in regulated sectors like financial services and healthcare, stringent controls are mandatory.
Solution Customizability – The chosen platform must be tailorable to unique workflows and use cases via configuration vs. coding.
Thoroughly evaluating options to find the right technology fit is crucial to long-term automation success.
Conclusion & Next Steps
As demonstrated across sectors, AP automation delivers game-changing performance improvements and cost savings. Typical benefits include:
✔ 80%+ cost reduction per invoice
✔ 50% faster payments
✔ 75%+ increase in process efficiency
✔ 90%+ improvement in reporting and visibility
To determine if AP automation is right for your finance organization, reach out to discuss your current challenges, automation goals and options for getting started: