Accounts Payable (AP) Automation software replaces manual invoice workflows—spreadsheets, paper trails, and email chains—with a centralized, digital process. It captures invoice data (PDFs, scans, uploads), validates it against purchase orders or contracts, routes for approval, and flags discrepancies for review. This provides:

• A clear approval workflow and audit trail 
• Visibility into spending patterns and vendor performance 
• Less fraud, faster processing, fewer exceptions 

In 2025, automation users report:

• ~49% touchless invoice processing (2× more than peers),
• 50% reduction in supplier inquiries,
• 59% fewer invoice exceptions. 

Why Choosing the Right Software Is Critical (and Hard)

There’s a wide market (expected to reach $17.4B by 2031), but many internal hurdles make picking—and implementing—the right solution challenging: 

1. Undocumented or inconsistent workflows – Automating messy processes just makes messy automation. 
2. Low visibility into current spending – Disparate systems and inconsistent vendor naming/coding make it hard to know what’s going on. 
3. Implementation complexity – Legacy systems, messy historical data, and inconsistent departmental practices can derail rollout. 
4. Resistance to change – Both internal teams (fear of new tools or disruption) and vendors (set in their invoicing habits) may resist. 

Choosing the Right AP Automation Software: Key Features

To get the most value, look for:

1. ERP integration – Native or direct sync with your ERP (e.g., Dynamics 365). Avoid custom or brittle connectors. 
2. OCR & Intelligent Data Capture – Must handle real-world invoice formats, scans, handwriting; accuracy improves with correction. 
3. Flexible approval workflows – Route invoices by department, amount, vendor; have backup workflows, self-service routing, and adjust without IT help. 
4. Security & compliance – Role-based access, encrypted data, activity logs, fraud detection, audit trails. 
5. User experience & support – Intuitive interface; trained support teams familiar with AP workflows; minimal disruption during updates. 
6. Scalability & analytics – Should handle growing invoice volumes and provide insight into spending, vendors, and processing performance. 

Best Practices for Effective AP Automation (Especially in Dynamics 365)

Here are top strategies to make automation stick and pay off: SignUp Software

1. Align AP goals to wider business objectives – Define specific metrics like cost reduction, improved vendor response, or risk mitigation.
2. Standardize data input – Use consistent templates or guidelines so invoice data is clean and uniform.
3. Set up multi-level approvals – Create hierarchical, conditional routing to avoid approval bottlenecks while preserving control.
4. Automate invoice matching – Implement 2- or 3-way matching between POs, invoices, and receipts to reduce manual fixes.
5. Use real-time analytics – Gain visibility into processing times, exceptions, trends; act before small issues snowball.
6. Leverage AI & machine learning – Automate error detection, predictive insights, and intelligent routing within Dynamics 365.
7. Enable mobile approvals – Approvers can sign off from anywhere, reducing delays in remote or hybrid setups.
8. Conduct regular process audits – Periodically review workflows, rules, and old exceptions to keep things efficient and compliant.
9. Monitor compliance continuously – Automate adherence to tax rules, region-specific regulations, and prepare for audits.
10. Build for scalability – Design workflows and capacity with growth in mind, ensuring responsiveness as volume increases. 

Bonus Tip: If you’re on Dynamics 365, embedded AP automation like ExFlow—built inside the ERP—offers smoother implementation, minimized disruption, and greater adoption. 

Implementation Strategy: Step-by-Step Rollout

1. Audit your current AP process – Identify inefficiencies, pain points, and outlier workflows.
2. Clean up your policies – Standardize naming, approvals, exception handling before automation.
3. Pilot one use case – Start with a department or invoice type, learn from it, iterate. 
4. Onboard vendors – Communicate new requirements and channels clearly, and offer support. 
5. Train your staff with real examples – Use actual invoices, realistic workflows, and provide post-launch support. 
6. Assign roles & permissions – Define who sees what, and how. Enable security controls like 2FA. 
7. Monitor metrics closely after launch – Track invoice volume, cycle times, exceptions, error rates; be ready to tweak. 
8. Keep optimizing – Automation isn’t “set and forget.” Use data and feedback to improve workflows continually. 

Summary

Why it matters: AP Automation transforms error-prone, slow workflows into streamlined, auditable, scalable processes.

What to look for: Integration, intelligent capture, flexible workflows, compliance, usability, and analytics.

How to do it well: Define goals, standardize inputs, automate matching, review processes, and build for scale—with real-world pilots and ongoing optimization.

Putting these pieces together—clear road mapping, the right software choice, and disciplined execution—can turn AP from a bottleneck into a competitive advantage. Contact the Sikich experts for more information on including ExFlow in your D365 tech stack.