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Table of Contents

• What is Accounts Payable Software?
• What are the common features of Accounts Payable Software?
• What are the benefits of Accounts Payable Software?
• How much does Accounts Payable Software cost?
• Key considerations when purchasing Accounts Payable Software

What is Accounts Payable Software?

Accounts payable (AP) software, also known as accounts payable automation software, automates managing and processing the funds a business owes to other parties, such as clients and vendors. The software offers tools to manage invoice approval, track payments, and optimize workflow efficiently.

Accounts payable software works on a set of instructions customized to complete financial transactions, from receiving bills to processing payments. For example, if a document requires approval from the business’s CFO, it will automatically forward the document and send reminders until the step is completed.

Accounts payable software is used as a stand-alone solution or integrated with accounting automation tools.

What are the common features of Accounts Payable Software?

• Approval process control: Capture invoice data, including amount, invoice number, vendor information, and record in the system. The feature also routes the captured data to the appropriate stakeholders for approval based on predefined rules or workflows.
• Invoice processing: Receive invoices via email or electronic data interchange (EDI) and extract the relevant information. The feature also verifies the data accuracy, shares for approval, and initiates the due payment.
• Vendor management: Track and store all vendor-related information, such as contacts, services offered, terms, etc. Also, manage vendor relationships by interacting with them via messages and emails and updating them on due or late payments in a timely manner.
• ACH payment processing: Receive credits and send direct debits through an automated clearing house electronic (ACH) network. This payment automation feature allows scheduling payments for specific dates or recurring payments.
• Audit trail: Maintain a detailed record of activities related to the accounts payable process. This creates a chronological history of data that can be reviewed and audited whenever required.

What are the benefits of Accounts Payable Software?

• Automates payment processing: Manual payment processing is prone to errors such as incorrect data entry or mismatched payment account details. An accounts payable system eliminates manual errors and delays by automating the payment process from receiving invoices to initiating payments. The software automatically calculates payment amounts and applies discounts or deductions to ensure precise payment allocation. This process saves time and speeds up the process of handling large transaction volumes.
• Provides accurate financial insights: Accounts payable software offers real-time reporting capabilities to track outstanding invoices, payment due dates, and cash flow positions. This process helps identify cash flow gaps and predict cash inflow and outflow for optimizing cash flow management. All to make efficient financial decisions backed by data.
• Centralizes access to data: Using accounts payable software, users can consolidate accounts payable information and documents in single cloud storage. This enables accessing data and documents from any device and location using authorized login credentials. Additionally, centralized access to data also eliminates the need to share details and documents via email. Overall, the feature enhances collaboration, reduces delays, and accelerates the invoice processing cycle.

How much does Accounts Payable Software cost?

Most accounts payable software products on the market are priced “per month”, and their entry-level pricing plan ranges from $2.39 to $1990+*. An enterprise product that’s priced higher may include additional features, such as pricing rules, tax deductions, expense tracking, and reconcile transactions.

*The pricing included is for the entry-level/lowest-priced offerings found on vendor websites as of July 18, 2023.

Key considerations when purchasing accounts payable software

• Assess the customization of workflow rules: See if the selected accounts payable software is flexible enough to define and configure workflow rules and task hierarchies based on the team’s requirements. This includes different approval levels, roles, and user responsibilities. Also, focus on the software capabilities to provide a visual interface or rule builder that allows non-technical users to define rules and hierarchies.
• Evaluate the invoice management capabilities: Assess the software capabilities to handle different invoice formats and electronic payment types and extract and capture data using OCR (optical character reader). Also, check if the software automates validating the invoice data by cross-referencing it with the purchase orders or receipts.
• Consider integration with accounting systems: Look for an accounts payable system compatible with the existing accounting system. The tool should support smooth integration and data migration without significant technical challenges and data compatibility issues. For this, users need to assess the built-in integration and API (application programming interface) capabilities of the software.