Accounts payable can be streamlined by implementing a standalone accounts payable automation tool or utilizing an inbuilt module within a procurement system. These tools help automate invoice and payment processing. They use optical character recognition to accurately capture invoice data and perform two- and three-way invoice matching.

By setting up role-based workflows, stakeholders can streamline payment scheduling and take advantage of early payment discounts by processing invoices in a timely manner. The centralized vendor and contractual information will keep payments on track and help avoid late payment fees. Inbuilt analytics and reports can be used to assess AP performance, optimize cash flow, and reconcile vendor statements on time, every time.

Recommended Reading:
List of procurement tools
What is procurement process?
What is vendor management system?
What is PO system?
Best eprocurement software in the market 2025
How to choose the best procurement software for small business?
Best vendor management tools in 2025
Procurement solutions guide
Differences between sourcing and procurement
What is the difference between procurement and purchasing?
Best strategic sourcing software tools in 2025

The first step in improving the efficiency and productivity of the procurement department is aligning its operations with the overarching business goals. Right after that an ideal procurement strategy needs to be devised. Investing in procurement software can help automate workflows and processes, track key performance metrics, and centralize critical supplier and purchasing information.

By investing the time and effort to train their procurement staff on high-impact areas such as strategic sourcing, category management, and other key areas, procurement teams can transition from transactional to value-driven processes. Fostering stakeholder collaboration, utilizing analytics to measure ROI and performance, and making data-driven decisions can position procurement as a strategic enabler of business success.

Invoice processing can be automated with the help of an accounts payable automation tool that supports e-invoices or with the help of an e-procurement solution. While most suppliers and buyers have switched to e-invoices, the optical character recognition (OCR) feature in invoice automation platforms comes in handy for extracting data from both paper-based and digital supplier invoices.

Once the invoices are scanned, they are matched against purchase orders and goods receipt notes using either a two-way or three-way matching process to flag discrepancies. When these documents match, then the predefined invoice approval workflows move the invoices to payment gateways for payment scheduling.

Invoice automation reduces manual intervention in the process by replacing manual data entry and eliminating associated risks and errors. E-invoicing accelerates the procure-to-pay process considerably and helps establish a digital trail of purchasing for smoother reviews.

Three-way matching is an internal control process of comparing three procurement documents before a payment is made to prevent overpayment. There are three critical documents involved in the three-way matching process and they are the purchase order, goods receipt note (GRN), and supplier invoice. The accounts payable team compares these documents against each other to perform the three-way matching process.

When performing three-way matching, the accounts payable team compares the information on the supplier’s invoice against the respective purchase order and goods receipt note (GRN). They ensure that the items, quantities, and prices match between the PO and invoice, while making sure that the invoice and GRN agree with the number of quantities delivered.

Accounts payable (AP) is a financial document that shows how much money an organization owes to its suppliers for the goods and services that were delivered on credit. In accounting terminology, accounts payable could be considered the current liability against an organization’s balance sheet.

Being a critical downstream component of the procure-to-pay process, accounts payable are usually expected to be paid off within a stipulated time period mentioned in the invoice. The key elements of accounts payable are: the amount of money owed, credit terms (Net 30, Net 90, etc), and its relationship with invoices.

More often than not, accounts payable also refers to the team responsible for making outgoing payments to meet these short-term obligations. This team is responsible for receiving and processing supplier invoices, performing three-way matching to verify invoice accuracy, obtaining necessary internal approvals for payment processing, and scheduling payments.