Automate accounts payable to optimize revenue and payments

The entire procure-to-pay lifecycle is ripe for automation because, as anybody who has spent time matching invoices with purchase orders can tell you, there has traditionally been an awful lot of simple, time-consuming, easily replicated work involved. Automating your accounts payable process can create a host of efficiency and optimization opportunities, including:

• Automating processes for invoicing, payments or a combined invoicing to payment process within a single platform
• Eliminating the burden of handling paper invoices and check payments
• Simplifying reconciliation of all payment types with one solution
• Expediting ROI through a simple, fast integration process
• Minimizing fraud across the payment process

Let’s look at the multiple levels of savings you can achieve by implementing AP automation.

Level one savings – a frictionless payment cycle creates efficiency

For starters, automation can improve accounts payable efficiency. "If you're a business and you're proactive, you will be looking to drive efficiency in your AP operation, trying to minimize the amount of manual work your teams do every day as it relates to the invoice-to-pay or accounts payable process,” says Anuradha Somani, Head of Payments, U.S. Bank Treasury and Payment Solutions.

To improve accounts payable efficiency, you can start by taking the manual work out of the invoicing process, automating the matching to the purchase order, and moving faster to approval to pay, Somani says.

Eliminating paper payments is at the heart of most banking automation. Digitization allows seamless, automated data processing between an accounting system or ERP (enterprise resource planning) system and your bank or payment service provider. But automation requires more than simple digitization.

Although an emailed invoice is “digital,” it’s not integrated. For these purposes, an emailed invoice isn’t much different than paper – each still needs to be captured in your system of record, whether that’s an ERP or homegrown accounting system, to facilitate automation.

Once it is captured, the data is matched to a purchase order, and the invoice is approved to pay.

“If that process is manual, invoice management is the most time-consuming part of the payables process,” Somani says. “There’s so much opportunity to drive efficiency by automating that process. Instead of spending all that time doing something that can be fully automated, you could spend your time managing the exceptions, working on supplier engagement or other activities.”

Once the invoices are matched and approved, payments can be automated by digitizing them. Rather than spending time and money to print checks, digital payments are delivered automatically, and in some cases, instantaneously, creating layers of efficiency – and opportunity.

“If I'm sending predominantly checks today, they're taking two or three days for the U.S. mail to deliver them – or even more,” Somani notes. “I have to deal with sending them earlier if I’m sending paper, and there’s the cost of printing, the cost of postage. Those costs and inefficiencies disappear with digital payments.”

The faster a business can approve invoices, the faster it’s prepared to make an early payment. That flexibility to make an early payment is not only a benefit to the payer but also to the supplier.

“It’s all working capital related,” she explains. “You can ask your suppliers about receiving a discount on an invoice payment if you pay earlier in the cycle. That can contribute to better working capital and liquidity for your suppliers. And it enables you to save money as the payer, so it's potentially a win-win."

Next level savings – adding revenue through rebates

Automating AP with digital payments not only reduces cost but can also generate rebates to offset banking fees.

“In some cases, suppliers will agree to accept an electronic payment,” Somani says. “In return for receiving remittance data electronically, getting paid a little faster, reducing the cost on their end to process paper checks, they may agree to a fee in the form of interchange on a virtual card payment or a premium price to receive ACH payments, sometimes called premium ACH, instead of checks.

“They may accept this fee because digital payments can improve the strength of the buyer-supplier relationship by enabling a better experience on both sides of the transaction,” she says.

The fee accepted by the supplier turns into a rebate for the payer. When a business can tap into a large existing network of suppliers that are global acceptors of virtual card, premium ACH and basic ACH, it may be able to create a net profit situation for the AP department where the aggregate amount of the rebates can exceed banking fees.

Best-in-class solutions can automate nearly 100% of your process and convert anywhere from 50% to 80% of paper payments to electronic payments.

Additional opportunities – reconciliation and analytics

Additional savings and benefits are available to businesses that choose to automate. When an AP department centralizes its process, reconciliation and analytics benefits also become available.

“An overlooked component of the AP process is the concept of the payment roundtrip. The process doesn’t really end until that open payable is closed out in the payer’s ERP system,” Somani explains.

“The gold standard for payment reconciliation is having the transaction ID flow with the payment right into the previous-day information reporting. And when loaded into the ERP, it can be automatically matched to the open payable,” she says.

“In many cases that transaction ID is not present in bank reporting, causing manual effort to reconcile accounts. By working with a provider that can help you automate the reconciliation process, it can be a significant timesaver.”

Beyond saving time, that level of automation can provide the analytics to:

• Identify trends and bottlenecks in AP processes
• Monitor the volume and value of invoices, related documents and payments
• Improve cash analysis, cash planning and liquidity management

Fraud risk mitigation too

A best-in-class AP automation system can also reduce the risk of payment fraud.

Account verification and validation is the new industry standard for fraud risk mitigation. Every time the business adds a new supplier and every time a supplier wants to change their account number, best-in-class solutions will verify that the supplier name matches the name associated with the account number.

That’s crucial to combating a common payment scam known as business email compromise (BEC), where a business is tricked into sending payment to an account number they think belongs to a legitimate payee but actually belongs to a criminal. It’s a common form of fraud. According to the 2025 AFP Payments Fraud and Control Survey Report, 63% of respondents experienced BEC.

“You can help prevent that form of fraud by validating that the name of the payee is tied to the account number,” Somani explains. “Best-in-class AP automation solutions basically eliminate that risk because you’re dealing with a closed system. The data is being stored in a place where if there's ever a request for a change to the account, it can be pre-validated before a payment goes out the door.”

Because industry-standard AP automation providers store supplier bank account numbers and other sensitive information within a secure system, they also protect against data theft, which has a value that goes beyond the bottom line.

“Imagine the impact to the relationship with my suppliers if their bank account information was stolen and every single one of my suppliers had to change their bank account,” Somani says. “That’s something businesses are always worried about, and it all but disappears with robust fraud protection capabilities.”

Optimize and secure your invoice-to-pay process by contacting your treasury management consultant. Learn how U.S. Bank is helping automate accounts payable.