How to Move Towards Paperless Accounts Payable

The financial industry is going through a profound shift as automation and digital innovation is set to redefine how financial operations are managed. Yet, despite the growing enthusiasm for digital transformation, implementation remains a significant challenge for many businesses.
While most business leaders understand the importance of digital transformation, modernizing a process like accounts payable can feel as daunting as steering a massive ship away from disaster.
Even so, the benefits of early adoption are undeniable. Moving to a paperless system can be the catalyst for increased efficiencies, cost reduction, elimination of data entry errors, and better vendor relationships – all while being more straightforward than you may think.
This guide outlines practical steps for moving towards paperless accounting, ensuring your accounting processes move swiftly into the digital age.
Why manual data processing no longer works
Legacy accounts payable processes have been around for a long time and look like this:
- Receive an invoice via email or paper.
- Match invoice to a purchase order.
- Manual data entry into an accounting system.
- Request an approval for invoice payment.
- Issue payment through check or electronic transfer.
This manual process hurts your business because it is prone to delays, documents are easy to misplace, the collection of important information is fragmented, and payment processes are much longer than businesses would like.
Leaving the legacy process behind requires a shift within AP departments to a paperless invoice approval system.
What is electronic accounts payable?
A paperless accounts payable system is a digital system where invoices are received digitally, read by the software, and then automatically entered into your accounting system in a cloud subscription or on your company’s servers. This way, you can access the information anytime and anywhere.
The digital AP process looks like this:
- Receive an invoice in electronic or paper format into a pre-accounting tool that uses machine learning and OCR to scan information and then load it into your accounting system.
- Information is automatically categorized into the correct accounts.
- A notification is sent to approvers to review the information and approve payment.
- A payment is scheduled within the system, and the vendor is notified of the payment.
6 Steps To A Paperless Accounts Payable Workflow
1. Meet with your AP team and discuss implementation
Modernizing processes within your organization requires input from employees directly involved with the change. Involve your accounts payable team to brainstorm ways to streamline the process of approving invoices. Consider these questions to help you strategize:
- What is the existing AP workflow?
- What improvements are needed to make the process better?
- Who will handle additional roles and responsibilities if the company automates invoice approval?
- How will the company assess the accuracy of the technology?
- What key performance indicators will the company have to track?
- Address concerns over the digitization project
2. Choose a software package that fits your needs
The best way to choose paperless AP software is to consider what features would be most helpful for managing your accounts payable processes.
Accounts Payable Software Checklist | |
Compatibility with different accounting software | |
OCR and data extraction capabilities to reduce manual data entry | |
Availability of a smartphone app for convenience and faster invoice processing when working remotely | |
User-friendly interface and accessibility to employees | |
Collaboration features that allow employees to have a single communication channel for all concerns about the invoice | |
Data collection, storage, and archiving for digitized invoices | |
Expense reporting features | |
Customizable permission systems allow users to change permissions given to employees based on their roles. | |
AI tools that can automatically process submitted reports based on rules and self-learning algorithms |
Using software that is constantly being developed — like Envoice, Xero, or QuickBooks Online — helps your AP department because they can always upgrade to the newest version. They also have the ability to improve its functionality and integrate it with other tools based on the company’s needs.
There is no one-size-fits-all software, and it’s important to find the right package for your company. If you’re looking for accounting tools to help you streamline your business processes, see what Envoice has to offer.
Let’s expand on some essential features of paperless software:
Data Capture Solutions
One of the first steps in automating accounts payable is to use data capturing or document scanning tools to scan and digitize invoices and automatically extract key information.
Data capture solutions can help you streamline how you manage accounts payable by eliminating manual entry errors and reducing the time it takes to process payments.
Using the Envoice Mobile Application, you can capture receipts and paper invoices while on the go—and know that your data has been captured precisely because of their ExactExtract tool.
This system adds human validation to the data capturing process, and you can be confident that 99.9% of the data is recognized and accurate.
Centralized Inbox
This is another way to streamline your accounts payable process. You can use a dedicated email address to receive and store all your invoices in one place.
With Envoice Inbox, suppliers can send your email invoices directly to Envoice. This will save you from having to place the attachments in your accounting software manually. It will also help your accounts payable team stay on top of their workload because they won’t have to search through different emails to start with invoice processing.
AI-based categorization
You can easily organize your invoices into the right categories with AI categorization.
The system uses machine learning and natural language payable processing to understand the content of the documents and automatically code incoming invoices. This will ensure that your data is accurate and easy to search through.
You can use the SmartRecord feature of Envoice to skip repetitive tasks. SmartRecord learns your behavior and uses AI to automatically categorize your invoices based on the information provided by your suppliers.
This means that instead of manually going through each invoice and trying to categorize or code the expenses, Envoice will do this for you.
Expense Management
Managing expenses is an essential part of running a business. It allows you to keep track of what you’re spending money on, which can help you make more informed decisions about your business.
Envoice provides a way to manage your expenses. The system allows you to manage electronic invoices, initialize invoice processing, and approve payment requests and reports from within the application.
You can also automate the workflows by creating smart rules and getting alerts when a document needs to be reviewed. It makes it easy for everyone involved to route the documents to approvers, track the status of the expense reports and process payments on time.
3. Set up user accounts
You’ve been working hard to make your accounts payable paperless. You’ve got a system in place and ready to take it to the next level.
But before you go any further, you need to set up user accounts for the people who will actually use your new system. That way, they’ll all be on the same page and won’t get confused about who does what when processing bills and invoices.
The process of setting up user accounts is pretty straightforward. You’ll want to have an efficient user authorization system through which you may grant and fine-tune access to employees depending on their actual needs.
You can also decide how much access each user should have so you can keep things organized. If one person is only responsible for data entry and another person makes sure everything is correct before it’s sent off to the approver, then make sure they have separate accounts with different permissions assigned to them.
If you need help setting up user accounts, contact your software provider. They will be able to provide you with step-by-step instructions on how it’s done.
4. Train employees on how to use the system
Training your accounts payable team on how to use your AP automation solution is key to ensuring that everyone understands how it works and how they can benefit from it.
This can be done through in-person training sessions or videos that walk users through tasks they’ll need to complete when processing transactions in your system.
Keep in mind that training should involve learning how to use the new software and what modifications need to be made in their daily routine so that they can easily adapt to dealing with digital papers rather than physical ones.
5. Track your progress and measure success
When you decide to have a paperless AP processing, you must track your progress and measure the success of this project.
When trying to do something new, it can be challenging to know exactly what’s working and what isn’t. That’s why it’s crucial that you set up systems for measuring your success so that you can see how your efforts are paying off and make adjustments as needed.
Here are a few things to keep in mind:
- Make sure your automation software is set up for easy tracking (and reporting) to see how much money is saved by going paperless.
- Know what “success” looks like for the project. If it’s saving money on printing costs or postage, then ensure those numbers are also tracked.
- Set goals for yourself each month so that when they’re achieved, there’s a sense of accomplishment and motivation to continue moving forward with other initiatives related to the project.

Benefits of a paperless accounts payable process
Transitioning to a paperless accounts payable system offers advantages that go beyond reducing paper documentation and ensuring better organization. If you’re still on the fence, here are five compelling reasons to make the switch to a paperless accounts payable process.
1. Reduced costs
Going paperless can hugely impact your business—not just in terms of sustainability or environmental impact but also in terms of cost savings.
Companies can decrease invoice processing costs to as little as $2.18 per invoice by focusing on automating core processes and using ePayables. Meanwhile, the average invoice processing cost has been around $10.8 per invoice. [1]
A paperless accounting system can also save your business money by reducing the office space you need to lease. You won’t need to dedicate any room in your office building to filing cabinets or boxes full of receipts, which means you can use this space for other purposes.
2. Improved efficiency
Accounts payable automation offers more efficient workflows, automated tasks, and more accurate data. It can expedite the processing of invoices and payments to vendors.
It takes about ten days to process a single invoice from receipt to the payment schedule. However, best-in-class organizations that leverage automation only take 3.3 days to complete the process.
3. Better security
The data in your paperless accounts payable software is more secure, as it’s not stored on physical documents that could be misplaced or stolen. It’s also easier for you to track changes and ensure that no one else has access to the information unless you authorize them.
This can be especially helpful if you have multiple employees. A paperless accounting system can help you prevent unauthorized access to sensitive information and protect against data breaches.
4. Improve payment accuracy
Going paperless is an excellent way to improve payment accuracy in your accounts payable department. When you’re dealing with the amount of paper that comes through the system, it can be difficult to keep track of what you’ve received and paid and when.
But when your accounts payable process is automated–you can make all of those payments from one place, so there’s less chance of mistakes and missed payment deadlines happening along the way.
A paperless accounts payable solution will allow you to schedule payments, automatically process them on the scheduled date, and take advantage of early payment discounts.
5. Reduced risk of fraud and errors
When dealing with paper documents, there’s always a chance of misplaced or lost invoices, which can cause problems if they contain confidential information. There’s also a good chance of errors when manually entering data.
Using an automated system ensures that all data is stored securely and accurately, so there’s less chance that data will be recorded incorrectly or lost along the way. As a result, your business will be more secure and efficient than ever.
Final Thoughts
Embracing a paperless accounts payable system is not just about keeping up with digital transformation—it’s about positioning your business for greater efficiency, cost savings, and security.
By leaving behind outdated manual processes and adopting automation tools, your business can reduce errors, improve payment accuracy, and even strengthen vendor relationships.
Integrating a pre-accounting tool, like Envoice, into QuickBooks Online, Sage, Xero, or MS Dynamics is the quickest way to get on track with all the benefits automation can offer you.
The tool integrates seamlessly with popular software and is responsive to the growing need for data accuracy and speed of invoice processing. They also offer a highly affordable subscription without compromising the quality of the technology.
Venture into automation without any risk to your current processes by signing up for their free 14 day trial.
References
STAY ALWAYS TUNED
Subscribe to newsletter
Still not sure?
- Don’t spend time on manual work
- Streamline bookkeeping processes with AI
- Automate invoice processing
- Integrate with the tools you rely on every day