How to switch to a paperless accounts payable process

Q: Can small businesses benefit from going paperless?

Absolutely. By automating repetitive AP tasks, small businesses often save on time and costs.

Q: What if I already use Xero or QuickBooks, do I still need a paperless AP solution?

Yes. While these systems deal with accounting, they don't provide advanced approval workflows.

Q: What happens to our old paper invoices?

You can scan and upload documents to your accounting system, if it makes sense, or to a cloud-based archive. Consult your accountant for advice.

Justin Campbell

accounts payable accounting efficiency tips

Despite the rise of cloud accounting software and digital tools, many finance teams are still drowning in paperwork. A 2024 survey found that 74% of AP teams are only partially automated, with just 5% achieving full automation – though nearly half (45%) plan to fully automate in the next year.

A paper-based accounts payable (AP) system is often time-consuming, error-prone, and hard to scale.

Chasing paper invoices, waiting on approvals, and manually filing documents isn’t just frustrating – it also prevents teams from doing more valuable work.

A paperless accounts payable process handles the full AP cycle electronically: invoice capture, approval and payment, with no printing, posting or physical filing. Cloud-based AP software, OCR capture and automated approval workflows replace manual data entry, so invoices are coded, routed and evidenced without anyone handling paper.

This is where a paperless accounts payable system comes in. It doesn't just replace paper. It simplifies audit preparation, gives finance managers more control over cash flow, and even improves relationships with suppliers.

In this article, we’ll cover what a paperless AP process looks like, how to switch, and what outcomes to expect.

Key takeaways

A paperless AP process runs invoice capture, approval, and payment digitally, cutting processing from roughly 12 minutes to 2-3 minutes per invoice.
The switch is a seven-step transition: evaluate your workflow, choose software, plan, migrate documents, onboard, train and test, then scale.
Faster approvals are the main prize: approvals taking too long was the most common AP challenge reported in 2025, cited by 49% of AP leaders.
Most teams go live in days or weeks, and the software that matters most integrates natively with Xero or QuickBooks Online.

What is a paperless accounts payable process?

Using a paperless accounts payable process means you don’t need to rely on physical documents. Rather than printing, posting, scanning, and filing paper invoices, everything is handled electronically.

But going paperless offers more than just storing documents online and scanning them. A digital AP process automates and simplifies the whole process. This might include:

Cloud-based AP software that integrates with your accounting system
Digital invoice capture tools that automatically extract key information
Optical character recognition (OCR) to read and process invoice data
Automated approval workflows that route invoices to the right people

These tools get rid of manual data entry, reduce mistakes, and speed up the AP process from start to finish while staying in control.

Stage	Paper-based AP	Paperless AP
Invoice arrives	Post, or printed from email	Email inbox, supplier portal or e-invoice feed
Data entry	Keyed in by hand	OCR extracts supplier, date, amount and lines
Coding	Written on the invoice, retyped later	Coding rules applied on capture
Approval	Invoice walked to an approver, or signed and scanned	Routed automatically, approved on mobile
Evidence	Signature on paper, or an email chain	Timestamped approval record against the document
Payment	Cheque printed and posted	Electronic payment from the approved record
Filing	Cabinet or off-site storage	Cloud archive, searchable
Audit	Reconstruct the trail from files and inboxes	Export the trail per document

Understanding the true cost of paper-based AP processes

A paper-based accounts payable process can be both inconvenient and costly. Paper, printing, and organisation costs add up fast, especially for large companies receiving lots of invoices. On top of this, physical documents need to be stored somewhere, so you might need to pay for filing cabinets or extra office space.

It also demands more time and effort from your team. Studies have even shown that a manual process can take over 12 minutes, while a paperless accounts payable system takes just 2-3 minutes.

There are also indirect costs to consider. Manual processes are more likely to cause mistakes leading to overpayments or duplicate payments. Slow processes can cause delays and run the danger of missing due dates, weakening supplier relationships, and paying late fines. Some businesses might miss out on early payment discounts too, just because they simply can’t process invoices fast enough.

Beyond this, repetitive admin takes up huge amounts of time that could otherwise be spent on more valuable work.

What the benchmarks say

Ardent Partners' The State of ePayables 2025, based on responses from 204 AP and finance leaders surveyed between March and May 2025, puts numbers on the gap:

Metric	Average	Top-performing AP teams	Everyone else
All-inclusive cost to process one invoice	$9.84	$2.65	$12.42
Time to process one invoice	8.2 days	2.9 days	13.5 days
Invoice exception rate	18.4%	11.1%	20.9%
Invoices processed straight through	35.4%	51.0%	29.0%

The single most common AP challenge reported in 2025 was approvals taking too long, cited by 49% of AP leaders. Just over half of invoices (51.4%) now arrive electronically - which means nearly half still do not.

Beyond this, repetitive admin takes up huge amounts of time that could otherwise be spent on more valuable work.

Is going paperless about to become a legal requirement?

Very soon in the UK, yes, and it is expected to follow in other jurisdictions as they weigh the success of Britains rollout.

Electronic invoicing becomes mandatory for all VAT invoices in B2B (and B2G) transactions from 1 April 2029, confirmed at the Autumn Budget on 26 November 2025. HMRC named Peppol as the interoperability network on 23 June 2026, and a full implementation roadmap is due at Budget 2026.

The important detail for AP teams: scanning is not compliance. PDFs, Word files and OCR images sit outside the definition of e-invoicing under the mandate. A true e-invoice is structured, machine-readable data the recipient's system can process without anyone re-keying it.

Country	What changes	From
UK	E-invoicing mandatory for all VAT invoices in B2B and B2G transactions, using Peppol	1 April 2029
Belgium	Structured B2B e-invoicing via Peppol BIS 3.0 for all VAT-registered businesses	Live since 1 January 2026
Poland	All B2B invoices routed through the KSeF platform (large taxpayers from 1 February 2026)	1 April 2026 for most VAT-registered businesses
France	All businesses must be able to receive e-invoices; large and mid-sized businesses must also issue them	1 September 2026
Germany	Businesses above 800,000 euro turnover must issue structured e-invoices; receiving has been required since January 2025	1 January 2027

Businesses that go paperless now are not just saving admin time. They are preparing for a process that will soon be obsolete anyway.

Step-by-step: How to transition to a paperless AP process

Ready to make the switch to a paperless accounts payable process? Here are a few simple steps to help you get started.

Evaluate your current AP workflow

Start by reviewing how you currently handle things. Consider how invoices are received, approved and paid. You might find that there are bottlenecks or manual tasks that are slowing things down.

Choose the right paperless AP solution

Look for programs that integrate well with your existing setup, like Xero or QuickBooks, and decide whether desktop or cloud-based platforms are the best fit.

Plan your setup process

Create a clear plan for putting a paperless accounts payable system in place. Consider possible timelines, which teams need to be involved, and how you will handle the switch.

Migrate your documents

Scan and upload any important paperwork that you need to keep. Many systems let you automatically import bills and safely store them.

Onboard your team

Involve your staff from the get-go. Show them how the new approach will free time for more important tasks and ease their workload.

Train and test

Run a pilot before going all-in. This will help you verify every step of the process to identify any problems early on and ensure everyone knows how to use the program.

Scale and adjust

Once it’s up and running, you can start to roll it out to more departments or locations. Keep evaluating and adjusting your process where needed.

Why businesses are ditching paper: key benefits

A paperless accounts payable system has many benefits that go beyond just removing paper.

Faster processing times

Invoices are handled in minutes rather than days, speeding up the payment process.

Lower risk of manual errors

Automation reduces data entry mistakes like duplicates or wrong amounts.

No more lost or misplaced invoices

Digital storage keeps everything organised and easy to find.

Avoid late-payment penalties and catching early discounts

Faster processing helps you avoid fees and take advantage of early payment offers.

Reduce storage and retrieval costs

Everything is done online, so there’s no need for off-site storage of filing cabinets.

Better fraud prevention and audit trails

Clear digital records simplify audits and help to spot fraud.

Remote access and business continuity

Teams supporting hybrid and remote working can manage AP from anywhere.

Full visibility and control

Real-time tracking of invoices and payments helps you to keep on top of spending.

Stronger vendor relationships

On-time payments translate into less conflict and improved supplier confidence.

Environmental benefits

Less paper reduces waste and helps sustainability efforts.

Improved security

Digital systems protect private financial information with encryption and access restrictions.

Better compliance and audit readiness

Automated records simplify audit preparation and help meet compliance requirements.

Real-time financial insights

Get up-to-date information on business spend to improve planning and decision-making.

Scalable as you grow

Digital systems can manage more invoices without increasing manual work.

Improve team collaboration

Cloud-based tools allow finance and other teams to better work together.

How to choose the right paperless AP software

Choosing the right accounts payable automation software can feel overwhelming with all the features and pricing options out there. To make it easier, here are a few key questions to ask when deciding which AP automation solution fits your business best.

Fit for your business

Can it manage the volume of invoices and team structure?

Easy integration

Will it work well with existing tools, like your ERP, Xero, or QuickBooks Online?

Customisation

Is it possible to tailor user permissions and workflows to meet your needs?

Key features

Does it cover every step of the accounting process, from capturing invoices to paying them?

Scalability

Will it grow with your business?

Ease of use

Is the interface easy enough for everyone to use, including members who aren’t tech-savvy?

Security and compliance

Does it help you maintain compliance and safeguard your data?

Insights and reporting

Is it possible to monitor spending and cash flow in real time?

Customer support

Is help available when you need it?

User feedback

What are the opinions of existing customers?

Transparent pricing

Are all the costs clear, including any extras?

Return on investment

Will your team save time and money as a result?

Real-world results: AP teams that went paperless

Iridium helps 70+ clients go paperless with ApprovalMax
South African accounting firm Iridium helped over 70 clients move away from paper and email-based approvals. With ApprovalMax, their clients now manage approvals fully online - saving time and cutting out the need for printed documents. This change made processes faster and gave businesses better control over their finances.

BLR Construction cuts approval time by 75% with ApprovalMax
Australian company BLR Construction moved from a manual, paper-based approval system to a faster, digital one using ApprovalMax. As a result, they cut approval times by 75%, saved over 50 hours each month, and reduced costs by around $22,000 AUD per year. Going paperless made their approval process quicker and gave them better visibility and control over spending.

BDO NZ helps clients ditch paper for good
With ApprovalMax, accounting firm BDO NZ helps its clients say goodbye to piles of paper – forever. Instead, it’s easy to route all approvals directly through ApprovalMax without needing to hit ‘print’.

The Icehouse saves 40+ hours a week after taking approvals off paper
New Zealand advisory business The Icehouse was already running Xero, but invoice approvals still moved on paper across three finance staff, ten approvers and around 400 invoices a month. Approvals took three to four days. After moving approvals into ApprovalMax, the paper system went entirely, approvals now complete in hours, and the business saves more than 40 hours a week, an estimated NZD 62,400 a year.

Organisation	Starting point	Result
Iridium, accounting firm, South Africa	Clients printed invoices, stacked them on desks and filed them physically	70+ clients moved to online approvals
BDO NZ, accounting firm	Client approvals ran on paper	150+ implementations, about 6.9 days saved per client per month
The Icehouse, New Zealand	Invoice approvals still ran on paper despite using Xero	40+ hours saved each week, estimated NZD 62,400 a year
BLR Construction, Australia	Manual, paper-based approvals	Approval time cut 75%, 50+ hours saved a month

How do accounting firms go paperless across a client base?

For an accounting firm, going paperless involves repetition of the same project across a client base, which is why it makes sense to build the workflow once and adjust it per client rather than designing it from scratch each time. Thresholds, approvers and entities change, but the structure does not.

Three things change for the firm itself:

Approvers don't access the ledger. Clients approve invoices without a Xero or QuickBooks Online licence, so sensitive data stays restricted and licence costs do not climb with every approver.
Client status is visible. Instead of asking a client whether they signed the invoice, the firm can see where each document is sitting, who is holding it and where the bottleneck is.
AP becomes a billable service. Once approvals are structured and evidenced, bill approval and payment prep is a service a firm can price rather than absorb.

The results firms report are per-client, not per-business:

BDO NZ has completed more than 150 implementations, with clients approving roughly 48,750 documents a month and saving about 6.9 days per client per month.
Next Dimension Accounting processes an average of 57 documents per client per month and saves about 1.2 days per client per month.
Le Contrôleur cut its own internal AP work from 10 to 15 hours a week down to 4 to 5, and more than halved a client's 15-day invoice approval cycle.

If you handle AP for clients, see how accountants run approvals across a client base.

Go paperless with ApprovalMax

Ready for a paperless accounts payable process? ApprovalMax helps businesses of all sizes move away from manual work. Enjoy a faster, more reliable, and paperless AP process. From automated approvals to accounting software integrations, it's designed to simplify your finances without printing. Schedule a demo today.

FAQs

Is switching to a paperless AP process expensive?

Not always. Many companies save money by reducing paper, postage, storage fees and admin time.

Do approvers need access to our accounting software?

No. With approval software sitting in front of the ledger, approvers see only the invoice and the details relevant to their decision. Sensitive financial data stays restricted, you avoid paying for extra Xero or QuickBooks Online licences, and every approval is still recorded against the document.

How long does it take to set up a paperless AP system?

Many teams launch in a few days or weeks rather than months, depending on the size of their company and existing processes.

Can small businesses benefit from going paperless?

Absolutely! By automating repetitive AP tasks, small businesses often save on time and costs.

What if I already use Xero or QuickBooks – do I still need a paperless AP solution?

Yes – while these systems deal with accounting, they don't provide advanced approval workflows.

Is a scanned PDF invoice the same as an e-invoice?

No. A scanned or emailed PDF is an image of an invoice, not structured invoice data. Under the UK mandate taking effect in April 2029, PDFs, Word files and OCR images fall outside the definition of e-invoicing. A true e-invoice carries machine-readable data the recipient's system processes without re-keying.

Is it safe to manage accounts payable online?

Definitely, as long as you choose a reputable and safe platform that’s dedicated to protecting your financial data – like ApprovalMax.

What happens to our old paper invoices?

You can scan and upload documents to your accounting system (if it makes sense) or to a cloud-based archive. Consult your accountant for advice.

What do we do about suppliers who still send paper invoices?

Ask them to email invoices to a dedicated AP inbox, and scan or photograph anything that still arrives by post. From there it joins the same queue as everything else: ApprovalMax Capture reads the document, extracts the supplier, date and amount, and pushes it straight into the approval workflow with no manual keying. Suppliers will not all move at once, so treat scanning as a bridge rather than the destination.

How can I measure the ROI of going paperless with accounts payable?

You can measure ROI by considering factors like time savings, control over spend, and reduction in paper-related costs such as printing and storage costs.

What internal policies need to change when switching to paperless?

It helps to establish new policies and processes when putting a new system into place to help your team stick to it. This might include mapping out new processes and documenting them clearly so current and new employees can easily check when unsure, as well as holding training sessions.

Can paperless AP help with regulatory compliance (e.g., tax, audit, GDPR)?

Yes, definitely. Paper-based processes can make it harder to meet compliance requirements, like audits, leading to extra stress at critical times in the year. With the right paperless AP process, you can capture all the information you need and securely store it digitally.Clear audit trails, safer data handling, and improved document management become much simpler with digital systems.

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.

Written by

Justin Campbell

Solutions Engineer

Justin is a Solutions Engineer at ApprovalMax with a decade of Xero experience in pre-sales and account management. He helps businesses implement robust financial controls and get the most from their accounting workflows.

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Key takeaways

What is a paperless accounts payable process?

Understanding the true cost of paper-based AP processes

What the benchmarks say

Is going paperless about to become a legal requirement?