What happened in Part 2? We covered, in great detail, the five most important steps of automating your AP and AR in 2025. Now, we continue.
[This is a four-part practical guide series. Direct links to all four parts at the end of this page]
Implementation scenarios
Theory is nice.
But the rubber meets the road when you actually implement this stuff.
Let’s get practical about how this works in different organizations.
AP/AR automation in enterprise companies
Big ships turn slowly. Enterprise AP/AR automation is a marathon, not a sprint.
Phased vs. big-bang approaches
The truth about big-bang: It almost always fails. One global manufacturer tried to automate 100% of their AP process across 23 countries simultaneously. 18 months later, they scrapped the project after spending $2.1M.
Phased approach that works:
– Start with one business unit or region
– Focus on high-volume, low-complexity processes first
– Expand to additional units only after proving success
– Add complexity with each phase
Pro tip: The ideal pilot isn’t your smallest or largest business unit. It’s your “Goldilocks” unit – complex enough to prove the concept but simple enough to succeed quickly.
Resource requirements
Be realistic about what it takes to implement AP/AR automation in enterprise companies:
– Technology team: 1-2 dedicated resources for 3-6 months
– Finance team: 2-3 part-time subject matter experts
– Vendor team: Implementation consultant and technical resource
– Change management: Often overlooked but critical – at least one dedicated resource
The biggest implementation failures happen when companies try to implement as a “side job” for already busy employees.
Pro tip: Instead of reassigning existing staff, hire a contractor specifically for the implementation period. They’ll focus 100% on success without competing priorities.
Timeline expectations
Here’s what actually happens in successful enterprise implementations:
Month 1-2: Process mapping, system configuration, integration setup
Month 3: Testing, training, pilot rollout to single unit
Month 4-6: Phased rollout to additional units
Month 7-12: Advanced feature implementation and optimization
From contract signing to full implementation averages 9 months in large enterprises. Vendors promising 3-month implementations are setting you up for disappointment.
The technical implementation takes 3-4 months. The organizational change takes 6-12 months.
Change management essentials
This is where enterprises often fail. The technology works, but the humans resist.
Change approach that delivers:
– Start communication 2-3 months before technical implementation
– Identify and convert influential resistors into champions
– Create super-users within each department
– Measure and celebrate early wins loudly
Pro tip: The most resistant employees often become your biggest champions once they experience the benefits. Find the vocal skeptics and win them over first.
Case snapshot: How a Fortune 500 manufacturer automated 95% of their AP process
Before automation:
180,000 invoices annually
42 AP staff across 7 locations
12-day average processing time
37% of payments missing early payment discounts
After automation:
95% straight-through processing rate
AP staff reduced to 18 (focused on analysis, not processing)
2-day average processing time
92% of available discounts captured
$2.4M annual savings between labor and discounts
The secret sauce: They didn’t just automate – they redesigned their entire vendor management process. They standardized payment terms, enforced PO requirements, and trained vendors on electronic submission.
The automation technology was just the final piece.
AP/AR automation in mid market companies
Mid-sized companies have advantages – they’re nimble enough to change quickly but complex enough to see significant benefits.
Right-sized technology selection
Don’t buy an enterprise solution for a mid-market problem.
Selection criteria that matter:
– Implementation time under 90 days
– Minimal IT resources required
– Out-of-box functionality that works without heavy customization
– Subscription pricing with minimal upfront costs
Mid-market companies often get oversold on features they’ll never use. Focus on core functionality that delivers immediate ROI.
Pro tip: Look for solutions with tiered implementation paths. Start with core AP/AR automation now, with the option to add advanced features later.
Resource-efficient approaches
Mid-market companies rarely have dedicated project teams. Make it work anyway:
Lean implementation model:
– One finance lead at 50% time commitment
– One IT resource at 25% time commitment
– Weekly rather than daily project meetings
– Vendor-led implementation with clear deliverables
Counter-intuitive advice: Don’t try to minimize vendor professional services to save money. A few extra days of expert help often makes the difference between success and struggle.
Start with high-volume vendors
Pick the low-hanging fruit first:
– Identify your top 20 vendors by invoice volume
– Standardize their invoice submission process
– Automate these vendors completely before expanding
Stat: Most AP/AR automation in mid market companies reveal that 20% of vendors represent 80% of invoice volume. By focusing on just this group, you can achieve 80% of the potential benefit in the first 60 days.
Case snapshot: How a 250-employee company achieved 85% touchless processing
Before automation:
2,500 monthly invoices
5 full-time AP staff
14-day average processing time
Frequent late payment penalties
Month-end close took 12 days
After automation:
85% touchless processing
3 AP staff (2 reassigned to financial analysis)
3-day average processing time
Zero late payment penalties in 12 months
Month-end close reduced to 6 days
They implemented in three clear phases over 6 months:
– Digital invoice capture and basic workflow
– PO matching and exception handling
– Payment optimization and vendor portal
Each phase delivered clear ROI before they moved to the next. Total project payback was 11 months.
The unexpected benefit: With AP under control, the finance team refocused on strategic initiatives. They identified $1.2M in unnecessary spending through deeper analytics – a benefit they never even considered in their initial ROI calculation.
Pro tip: Implementation isn’t one-size-fits-all. The key is matching your approach to your organization’s size, complexity, and culture. But regardless of size, focusing on core processes first and expanding from a position of success is the universal formula that works.
The human factor
Technology is not your biggest challenge in AP/AR automation. People are.
We’ve seen flawless technical implementations fail because the human element was ignored.
Let’s fix that.
Workforce transformation
The old pitch for automation was simple: “We’ll cut your headcount!”
That thinking is not just outdated – it’s dangerous.
Modern workforce transformation looks like this:
– 20-30% reduction in transactional roles
– 15-20% increase in analytical and strategic roles
– Significant upskilling of retained team members
If you’re only looking at headcount reduction, you’re missing the bigger opportunity – transforming your finance function from transaction processors to strategic advisors.
Example: One retail company reduced AP headcount from 14 to 9, but simultaneously created 3 new roles in vendor management and cash flow optimization. Net reduction was only 2 positions, but strategic value increased dramatically.
New roles and upskilling pathways
As transactional work decreases, new roles emerge.
Emerging roles in automated AP/AR:
– Data quality specialists: Ensure master data stays clean and structured.
– Exception analysts: Identify root causes and implement permanent fixes.
– Vendor optimization specialists: Analyze spending patterns and negotiate better terms.
– Cash flow strategists: Use payment timing to maximize working capital.
– Process improvement experts: Continuously refine automation rules and workflows.
Don’t just train on new technology. Train on analytical thinking, process design, and vendor relationship management.
Pro tip: The most successful transformations budget 5-10% of the total project cost for training and role development. This investment typically pays back 3-5x in long-term value.
Why staff resistance happens
Staff resistance isn’t irrational. It’s based on legitimate concerns.
The real reasons people resist automation:
Fear of job loss. The most obvious and rarely addressed directly.
Loss of expertise value. “If the system does what I know, what value do I bring?”
Disruption of routines. Never underestimate humans’ attachment to familiar processes.
Lack of input. People resist changes they weren’t consulted on.
Poor training. “I don’t understand this, so I don’t trust it.”
Most resistance comes from lack of clarity about the future. People fear what they can’t see.
Don’t just announce changes. Co-create the future with your team. Let them help design new processes and define new roles.
Managing the transition period
The transition period is messy. Plan for it.
Transition management that actually works:
Run parallel processes temporarily. Don’t go cold turkey. Allow a transition period where both old and new systems operate.
Create a “no blame” zone. Encourage reporting of issues without fear of criticism.
Celebrate early wins loudly. Find and publicize examples of how the new system is already delivering value.
Provide extra support at critical moments. Month-end close during transition requires all hands on deck.
Pro tip: Create a dedicated “war room” (physical or virtual) where team members can get immediate help during the transition. This reduces anxiety and speeds adoption.
The most successful transitions include the “most resistant” employees in the implementation team. Their skepticism often identifies real issues early.
The mixed emotions of automation
Let’s acknowledge a difficult truth: automation brings mixed emotions.
One AP manager told us: “I’m excited about not doing mind-numbing data entry anymore. But I’m terrified that I don’t have the skills for whatever comes next.”
How leaders can help:
– Be transparent about the future. Don’t sugar-coat the changes.
– Create clear development paths. Show people how they can grow.
– Recognize the emotional journey. Allow space for both excitement and anxiety.
– Provide individualized transition plans. Different team members need different support.
The companies that handle the human factor best retain their top talent through the transition. The ones that ignore it lose their best people and struggle with the new technology.
AP/AR automation isn’t just a technology project – it’s also a people transformation project.
Get the technology right but the people wrong, and you’ve failed. Get both right, and you’ve created lasting competitive advantage.
Measuring success
Automation without measurement is just expensive technology.
Yet we’re constantly shocked by how many companies implement AP/AR automation without clear success metrics.
Let’s fix that. Here’s how to actually measure whether your automation is delivering value.
Essential KPIs for automated AP/AR
Not all metrics matter equally. Focus on these high-impact indicators:
Processing efficiency metrics:
– Cost per invoice: Total AP cost ÷ Number of invoices (target: <$2.50) – Invoices processed per FTE: Monthly invoices ÷ FTE count (target: >5,000)
– Straight-through processing rate: Invoices requiring no human touch ÷ Total invoices (target: >80%)
– Exception rate: Invoices requiring manual intervention ÷ Total invoices (target: <15%) Financial impact metrics: – Days Payable Outstanding (DPO): Average days taken to pay vendors (target: Optimized to terms) – Early payment discount capture rate: Discounts captured ÷ Discounts available (target: >90%)
– Late payment percentage: Late payments ÷ Total payments (target: <1%)
– Working capital impact: Net change in cash position due to payment optimization
Pro tip: The best companies create balanced metrics that prevent gaming the system. Focusing only on DPO might improve cash position but damage vendor relationships if pushed too far.
Benchmark data for 2025
How do you stack up against top performers?
Here’s what the best-in-class companies are achieving in 2025:
| Metric | Average | Top Quartile |
| Cost per invoice | $4.80 | $1.95 |
| Invoice cycle time | 8.6 days | 2.4 days |
| Straight-through processing | 65% | 92% |
| Exception rate | 23% | 7% |
| Staff hours on transaction processing | 62% | 15% |
| Staff hours on analysis | 18% | 65% |
Don’t expect to hit top quartile immediately. Set progressive targets: move from current state to average within 6 months, then from average to top quartile within 18 months.
If you’re not measuring these metrics now, you have no baseline for improvement. Start tracking them immediately, even before automation.
ROI calculation that works
Most ROI calculations for AP/AR automation are overly simplistic. Here’s a more comprehensive approach:
Direct cost savings:
– Labor cost reduction (transactional roles)
– Paper and storage elimination
– Reduced audit costs
– Elimination of late payment penalties
Financial benefits:
– Early payment discount capture
– Working capital optimization
– Fraud reduction
– Currency optimization
Strategic value:
– Redeployment of staff to value-added activities
– Better cash flow forecasting
– Enhanced vendor relationships
– Faster financial close
Quick calculation: For a mid-sized company processing 5,000 monthly invoices, typical first-year savings range from $350,000 to $500,000, with a 12-18 month payback period.
Second-year ROI typically doubles as teams optimize the system and capture more strategic benefits not initially anticipated.
Looking beyond cost reduction
Cost savings get projects approved, but they’re rarely the most significant benefit long-term.
The overlooked benefits that deliver massive value:
Financial visibility: Real-time cash flow forecasting enables better investing and borrowing decisions.
Vendor relationship enhancement: Consistent, transparent payment processes create leverage for better terms.
Fraud prevention: Pattern detection catches suspicious activities human reviewers miss.
Regulatory compliance: Automated controls ensure consistent compliance with tax and financial regulations.
Example: A healthcare provider estimated $400K in annual labor savings from AP automation. What they didn’t anticipate: $1.2M in additional value from prevented fraud, captured early payment discounts, and reduced audit costs.
Day-to-day measurement practices
Metrics only matter if they drive behavior. Here’s how to make measurement practical:
Create visual dashboards. Make key metrics visible to everyone, updated daily.
Establish weekly review rituals. Spend 30 minutes weekly reviewing trends and addressing issues.
Link metrics to specific people. Make it clear who’s responsible for improving each metric.
Build graduated targets. Create progressive improvement goals rather than final targets.
Pro tip: Create a simple red/yellow/green status for each key metric. This allows quick daily assessment without getting lost in numbers.
If you can’t explain your AP/AR performance in three numbers that executives understand, you haven’t defined your metrics properly.
Remember that measurement isn’t about creating reports – it’s about driving improvement.
The right metrics, consistently tracked and publicly displayed, don’t just measure success – they create it.
Future-proofing your investment
Here’s a painful truth: many AP/AR automation systems become obsolete within 3-5 years.
Technology moves fast.
Business needs change.
What works today might not tomorrow.
But it doesn’t have to be this way. Smart companies future-proof their automation investments from day one.
Choosing adaptable solutions
The key isn’t picking the solution with the most features today. It’s selecting the one that can evolve tomorrow.
Adaptability factors that matter:
Modern architecture. Cloud-native solutions built on microservices adapt faster than monolithic platforms.
Configurable workflows. Avoid hard-coded processes that require vendor intervention to change.
User-manageable rules. Your team should be able to adjust business rules without IT help.
Open API framework. The system should easily connect with new applications as they emerge.
Some vendors require expensive professional services for even minor changes. One manufacturing company paid $15,000 for a simple workflow adjustment their team could have made themselves with a more adaptable solution.
Pro tip: Smart question to ask vendors: “Show me how your product has evolved in the last 24 months.” If they can’t demonstrate substantial improvements, they likely won’t keep pace with future needs.
Integration capabilities assessment
Today’s integration is straightforward. It’s tomorrow’s integrations that matter.
Future-proof integration capabilities:
Vendor-maintained connectors. The vendor should actively maintain connections to major ERPs and financial systems.
Robust API documentation. If you need custom integrations, clear documentation makes this possible.
Integration monitoring. Look for solutions that actively monitor and alert on integration issues.
Self-healing connections. Advanced systems can detect and resolve common connection problems automatically.
Integration isn’t a one-time event. It’s an ongoing relationship between systems that requires maintenance as both sides change.
Pro tip: Create a quarterly “integration health check” to proactively identify potential issues before they affect operations.
Technology obsolescence prevention
Technology moves fast. Protect your investment with a deliberate obsolescence prevention strategy.
Risk mitigation tactics that work:
Vendor viability assessment. Evaluate the financial health and investment patterns of your technology providers.
Regular upgrade schedule. Plan and budget for quarterly updates rather than infrequent major upgrades.
Feature adoption program. Systematically evaluate and implement new capabilities as they’re released.
Competitive benchmarking. Annually assess your solution against newer market offerings.
The fastest path to obsolescence is failing to use the features you already have. Most companies use less than 60% of their automation system’s capabilities.
Pro tip: Create a dedicated “automation evolution team” responsible for continuously enhancing your system. Even a small time commitment (5-10 hours monthly) delivers massive returns.
Building continuous improvement mechanisms
Automation isn’t “set it and forget it.” It requires ongoing optimization.
Continuous improvement framework that delivers:
Monthly exception review. Analyze patterns in exceptions to identify automation improvement opportunities.
Quarterly rule refinement. Adjust matching and approval rules based on actual results.
Bi-annual process reassessment. Step back and evaluate if the process itself (not just the automation) needs redesign.
Annual vendor innovation review. Meet with your vendor to understand their roadmap and new capabilities.
Pro tip: Create an “automation improvement idea” channel where users can easily submit suggestions. The best ideas often come from daily users.
Stat: Companies that dedicate 5% of their initial implementation budget to annual improvements see 3-4x greater ROI than those who simply maintain their systems.
Balancing stability and innovation
There’s a natural tension between stability (keeping things working) and innovation (making things better).
Practical balancing tactics:
Testing environment. Maintain a separate environment to test changes before implementation.
Change control board. Create a simple governance process for evaluating improvements.
Impact assessment matrix. Evaluate potential changes on both benefit and disruption scales.
Phased rollout approach. Implement changes with a subset of users before full deployment.
Most companies err on the side of stability, foregoing valuable innovations out of fear of disruption. This eventually leads to major painful overhauls rather than smooth evolution.
The goal isn’t just to automate your AP/AR processes once.
It’s to create a continuously improving system that gets better every quarter. The companies that dominate their industries don’t just implement technology – they are actively involved in evolving it.
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A step-by-step guide to automating accounts payable and receivable in 2025 – an advanced, practical blog-series in four parts.
Part 2: https://exelafaosolutions.com/blog/a-step-by-step-guide-to-ap-and-ar-automation-in-2025
Part 4: (coming soon)
DISCLAIMER: The content of this blog is for informational purposes only and does not constitute financial, legal, or accounting advice. Readers should consult with professionals before making financial decisions based on the content. We disclaim any liability for actions taken based on the information provided and make no warranties regarding its accuracy or completeness. The views expressed are based on research conducted by the company and reflect the author’s opinions. They do not constitute any representation or warranty of accuracy or completeness.
