Home Blog Accounts payable automation ROI: Costs and benefits

Accounts Payable

Accounts payable automation ROI: Costs and benefits

By Justin Campbell

17 min read •

June 16, 2025

8 reasons to tighten your financial controls for Xero users

Strong financial controls bring a whole heap of benefits, helping to detect and prevent fraud, limit access to your accounting system, put documents in the hands of the right people – and that's just the beginning.

Download the guide

Start a free trial

With approval automation, technology handles your entire accounts payable (AP) process from start to finish. Automating approvals has a whole heap of benefits; it processes more transactions faster, and with fewer errors, to save on costs and boost efficiency.

Many successful businesses automate routine tasks like accounts payable to improve efficiency and grow their business with less effort. According to a PYMNTS and Amex survey, 73% of executives say AP automation improves cash flow, while 83% report AR automation drives accuracy and efficiency – automation isn’t just operationally smart, it’s financially strategic.

However, every business investment does come with a cost. So how do you work out the return on investment (ROI) for approval automation? This article gives you a clear overview of how automating manual tasks helps your business so you can calculate the ROI for your unique use case.

How do businesses process AP?

To start, think about your current accounts payable process. How would automation improve it? For example, if you were to send a purchase order (PO) for $5,000 of materials and receive the order on 15 March, here's how approval automation would handle each step:

Invoice receipt and data capture

When a supplier emails you an invite, approval automation systems that use OCR technology will automatically extract the right details and pull them into your workflow. This saves you time spent manually uploading or entering details.

Invoice approvals

Once an invoice is uploaded to the system, the relevant approvers receive a notification to check and approve the details are correct. Depending on the setup, this might also include matching the invoice to a PO or budget. Once approved, the system automatically passes the invoice onto the next approver (or does it at the same time), based on your approval matrix.

Accounting entries

Once approved, the invoice automatically flows right into your accounting software, attaching the proof of approval via an audit trail.

Payments

Approved invoices will generally appear as a bill awaiting payment, depending on your accounting or ERP system. These might be paid individually or via a bulk payment; your accounting department then processes the payment and records it.

Documentation

Every document, accounting entry, and payment record lives in your approval solution and your general ledger. Finding past transactions becomes simple whether you need to research something or prepare for yearly audits. The clear organisation of your records significantly speeds up any audit process.

Analysing your accounts payable automation ROI

So how do you actually build the case for buying accounts payable automation software? Calculate the potential ROI but take a closer look at the costs and benefits involved.

Reviewing costs

First, find out the costs involved with automating AP. This might include an approval automation tool, along with OCR and payments processing. Map out these costs, how often they occur, and if they’ll need to scale or increase in the future as your business grows.

Potential setup costs: Figure out what’s involved with setting up AP automation. This isn’t just the costs but time of people involved, whether they’re internal team members or external consultants. Check if any ongoing maintenance is required.
Maintenance costs: Factor in ongoing maintenance costs beyond the initial setup. This includes software updates, technical support packages, and potential hardware upgrades. Ask vendors about their update schedule and whether updates are included in your subscription or require additional payment.
Scalability and associated costs with scaling: Consider how costs change as your business grows. Will you need to purchase additional user licenses? Are there transaction volume limits that might trigger higher pricing tiers? Staying on top of these future costs helps you plan for growth without budget surprises.
Training and customer support: How much training will the software vendor provide? Your team will need comprehensive training to make sure they understand and actually use the new tools. Issues often pop up when people aren’t properly trained and bypass new systems, going back to their old ways of doing things.

Get answers to these questions from each potential vendor. The answers will help you figure out if the AP solution will allow you to scale.

If you increase the number of AP transactions, you need to minimise the cost per transaction to maintain profitability.

Identifying benefits

AP automation provides several benefits:

Faster processing

Your business can process more transactions in less time, saving time that can be spent on more strategic tasks.

Fewer errors

Automation reduces errors that occur with manual processing. Your team can avoid incorrect or duplicate orders, saving time and money.

Fraud prevention

Tools help detect unusual transactions quickly and minimise the risk of fraud.

Compliance and audit support

AP automation captures all the right information to share with external auditors or to regulators, and can even simplify your audit preparation

Management and reporting

Managers have access to real-time reports on invoice status, pending approvals, spending by department, budget vs. actuals, and vendor performance – giving them the insights to make faster, informed decisions.

Less risk of errors

Strong approval workflows serve as a shield for your business. The right controls catch honest mistakes, like duplicate invoices, before they get the chance to affect your bottom line.

Better cash flow visibility

With all incoming invoices going through the correct approval process, it’s easier to see what payments are coming up and when, so you can plan your finances more effectively.

Budget control

Automated budget checking spots potential overspending before it happens. Your managers get alerted when a purchase would push spending beyond set limits, helping you stay on top of spend.

To work out the ROI, bring your finance team together to find out exactly how long your current accounts payable process takes.

Ask them how much time they spend on approvals, hunting down lost invoices, and fixing errors. Keep track of these numbers for the next step.

How to calculate the accounts payable automation ROI

Now that you know the main costs and benefits, here’s how to bring it all together in a simple ROI formula:

accounts payable roi equation

What goes into your total costs and total savings?

Total savings may include:

Time saved on invoice processing (labour savings)
Reduced audit preparation time and lower auditor fees
Fewer errors and less time correcting them
Protection against fraud
Early payment discounts captured thanks to faster processing

Total costs may include:

AP software subscription
Setup time from your internal finance or IT team
Training and onboarding for your team
Maintenance and support fees
Scalability (more users or higher transaction volumes as you grow)
Potential consultation fees

Benchmark reference:

According to Ardent Partners’ AP Metrics that Matter in 2024 report, the average cost to manually process an invoice is $9.87, while automation reduces this to just $2.00.

What can affect your ROI?

Keep in mind, ROI can vary depending on:

How manual your current AP processes are
The number of invoices you process monthly
How complex your approval workflows and audits are
Internal salaries (especially for senior finance staff)
Whether you take advantage of early payment discounts
How well the software is set up and used by your team

Successful AP automation ROI cases

Here's a real story about accounts payable automation from The Icehouse, a team that used to spend days chasing paper approvals. With just three people in finance and 400 invoices to handle each month, they were stuck in a process that literally needed a full-time person just to manage signatures. Sound familiar?

After switching to ApprovalMax, they ditched the paper trail and cut invoice processing time by up to 80%. Now, invoices move through a smart multi-level approval flow – some get approved in under 24 hours. No more delays, no more guesswork. Just a system that works.

And the payoff? Over 40 hours saved every week, translating into estimated yearly savings of NZD $62,400 (USD $37,767) and a staggering 7,900% ROI.

How to set up AP automation for maximum ROI

The setup process directly affects your accounts payable automation ROI. Get it right from day one and your team will thank you.

Pick the right time

Don't go live during chaotic times like year-end or audit season. Choose a quieter period when your team can actually focus on learning without panicking about deadlines. Most businesses nail it during their less hectic months.

Map your current processes first

Map out how you currently handle approvals before you even look at software. Document the bottlenecks, the stuff that always goes wrong, the time-consuming tasks. This baseline shows you exactly what needs fixing and helps you pick software that actually solves your problems.

Bring the team on board

Rather than rolling something out from the top down, bring your team on board to design the new approach. This way, they’re bought in and understand the new process – plus can be certain it will work for them.

Design your approval matrix

Decide upfront who approves what and when. Approval automation only works when everyone knows the rules. Don't forget backup approvers for when someone's on holiday or off sick – in the right tool, you can automate this whole process.

Prioritise user training

Your ROI thrives based on how well your team uses the system. Don't just show them the buttons - teach them your specific workflows. Appoint some ‘super users’ who can help their colleagues when they're stuck.

Prepare for change management

Some team members might resist moving away from familiar manual processes. Talk to them early, show them how the new system makes life easier, and celebrate the quick wins. Good change management significantly improves adoption rates and overall ROI.

Set up proper integrations

Work with your IT team or vendor to connect everything with your accounting or ERP software, plus any other relevant systems. Smart integrations eliminate manual tasks and unlock the full efficiency benefits of AP automation.

Conclusion

Calculating accounts payable automation ROI isn't just about spreadsheets and formulas. While the hard numbers matter, the real value shows up in improved team efficiency, strong financial controls, and easier audit preparation.

The businesses that see the best results do these things well: they honestly assess their current processes, manage the change properly, and choose software that actually fits their needs.

Accounts payable automation delivers more than time savings. It creates strong financial controls that protect against fraud and give you clear visibility into your cash flow. When set up correctly, you get both operational improvements and strategic oversight.

Start your accounts payable automation journey

Manual invoice processing wastes time and creates unnecessary errors. ApprovalMax provides a practical solution that works with your existing systems and shows real results.

Try our 14-day free trial to see how AP automation software fixes your workflows. Test it with your actual invoices and approval processes to see the difference.

No credit card needed. Support available throughout your trial.

Start your free trial now.

FAQs

How long does it take to implement accounts payable automation?

Most businesses complete setup within 4-8 weeks, depending on the complexity of their approval workflows and the size of their team. Training typically takes 1-2 weeks.

What's the minimum transaction volume needed to justify approval automation ?

Even businesses processing 10-20 invoices monthly can see positive accounts payable automation ROI. The key factors are your current labour costs and the time spent on manual approvals.

What if our approval workflows are particularly complex?

AP automations usually work well with complex workflows. In fact, these businesses often see the highest ROI from accounts payable automation since manual processes become increasingly inefficient as complexity grows.

Can the automation integrate with our existing accounting software?

Most approval automation solutions integrate with popular accounting platforms like Xero, QuickBooks Online, and NetSuite. Check with your chosen vendor about specific integrations before committing.

Is accounts payable automation secure?

Reputable approval automation platforms use bank-grade security measures including encryption, role-based access controls, and detailed audit trails. These often provide better security than paper-based or email approval systems.

How much does accounts payable automation cost?

Costs vary based on your business size and needs. Most platforms offer tiered pricing starting from around $45-$100 per month for small businesses, scaling up based on users and transaction volume.

Justin Campbell, an experienced accountant with a decade at Xero, blends his deep understanding of finance and technology to simplify processes. He uses his expertise to help businesses work smarter, bringing precision and innovation to every initiative.