AP Automation: Solving The Pain Points Of SMEs

Automating accounts payable is no longer a new concept for large corporations worldwide. Once considered exclusive to large enterprises, accounts payable automation has now become essential for small and medium-sized businesses (with annual revenue below $1 billion), offering significant benefits not only to the business itself but also to its customers. However, a study reveals that only 5% of medium-sized companies have fully automated their processes, and 15% have automated three or more tasks. Source: PYMTS.com

According to PYMTS.com, these numbers are evolving as more small and medium-sized businesses begin to realize the exceptional potential and benefits of AP automation, especially with the advancement of AI-driven solutions. As customer demand for efficient, accurate payment processing rises, businesses must equip themselves with the right tools to meet these expectations.
Read more: AFusion Top 6 Accounts Payable Trends for 2025

1. Minimizing Paperwork and Manual Labor, Saving Time

Accounts payable (AP) is a field that often requires extensive time and labor to manage.

Traditionally, the AP process involves many repetitive manual tasks, such as invoice data entry, document storage, and payment processing. These steps consume significant time and are prone to errors, which can lead to auditing and financial reporting issues. AP automation eliminates these manual processes by digitizing all invoice and document data. Through software solutions, companies can automatically recognize, match, and store invoices from multiple sources, drastically reducing paperwork and minimizing data entry tasks.

Automated AP systems allow companies to save substantial time and resources, consuming tasks so they can focus on strategic and high-value activities for the company. For businesses handling a high volume of invoices, automation can save hours each day, enhancing overall efficiency and reducing costs associated with document management.

With AP automation, you can achieve key performance indicators (KPIs):

2. Scalable AP Automation Customized to Your Business

One major advantage of accounts payable automation systems is their flexibility to scale and adapt to the unique needs of businesses of different sizes. For small and medium-sized businesses, these solutions can meet basic requirements such as invoice processing and payment tracking. However, as a business grows, the system can be easily adjusted to integrate more complex features without requiring a fundamental restructuring.

This adaptability not only helps businesses save costs but also provides stability in operations. Modern AP automation systems also have the capability to integrate with other financial management software and ERP (Enterprise Resource Planning) systems, enhancing data connectivity across departments and supporting more effective financial management. This allows businesses to have full control over the payment process without the worry of inflexibility or excessive expansion costs.

3. Reducing Risks and Combating Fraud

Payment fraud is a serious issue for many businesses, especially those that still rely on paper-based and manual management of payment processes.

According to Creditsafe, over half of companies lose more than 30% of their total revenue annually to fraudulent activities. Creditsafe explains, “Fraud can have devastating consequences on a company’s net profit.” “Not only do you lose loyal customers and sales, but there’s also the potential for lawsuits, which can lead to legal costs and fines.”

Statistics from Eftsure reveal that 20% of reported payment fraud cases are carried out through collusion between internal and external actors. CFOs and AP teams should be vigilant about internal perpetrators, known as insider threats, as they have access to sensitive company data.

AP automation solutions help prevent fraud through advanced technologies like artificial intelligence (AI) and machine learning. These systems can detect unusual transaction patterns, flag invalid invoices, or highlight high-risk transactions, thereby alerting users to potential issues. Additionally, with automatic control and reconciliation, businesses can minimize errors and omissions in the payment process. Transactions are recorded accurately, aiding in compliance with audit requirements and enhancing transparency in financial management. This not only protects businesses from legal risks but also fosters trust with partners and customers.

4. Timely Payments and Improved Cash Flow

Cash flow management is crucial for small businesses, including the ability to control payments for essential products and services. However, despite using accounting software, many businesses still spend significant time processing each invoice manually—a process prone to errors and information gaps.

Companies recognize that AP automation has a direct impact on cash flow management. Nevertheless, only a limited number of companies have fully automated their AP processes. One of the most important benefits of AP automation is its ability to ensure timely payments, strengthening relationships with partners and suppliers. When businesses consistently meet payment deadlines, suppliers are more likely to trust and support them, especially during times when inventory or special discounts are needed. This strengthens the business’s reputation among partners.

Timely payments also play a key role in optimizing cash flow, a critical factor that enables a business to sustain stable operations and pursue new investments. Automated AP systems allow businesses to closely monitor cash inflows and outflows, send alerts for upcoming or overdue payments, and adjust financial plans accordingly. With effective cash flow management, businesses can maintain financial stability and improve strategic decision-making capabilities.

Conclusion

Automating accounts payable is more than a step toward modernization; it is a strategic investment that optimizes processes, reduces risks, and enhances financial performance. With benefits such as reducing paperwork, saving time, providing scalable flexibility, minimizing risks, and optimizing cash flow, businesses can not only thrive but also better adapt to changing market dynamics. Investing in AP automation is a wise choice for any business seeking to advance and strengthen its competitiveness in today’s dynamic market.

Are you interested in learning how AFusion automates accounts payable for SMEs businesses? Discover more now.