Accounts Payable (AP) Automation Tools Benchmarking in 2023: An In-Depth Comparison

Accounts payable (AP) process automation is top of mind for many finance leaders today. Manual AP processes are inefficient, error-prone and lack visibility. AP automation promises huge benefits – optimized workflows, reduced costs, better compliance and data insights.

But with so many vendors offering AP automation solutions, how do you pick the right tool for your needs? Which features really matter?

This comprehensive guide will decode AP automation, benchmark major vendors, and provide data-backed insights to help you make the smartest choice in 2023.

Why AP Automation Benchmarking Matters Now

Multiple factors are driving increased adoption of AP automation:

  • Remote work – Distributed teams need better visibility and automation for financial tasks. AP automation provides this.
  • Compliance needs – Regulations like tax laws are constantly changing. Automation ensures compliant AP workflows.
  • Cost pressure – Manual AP processes are expensive. Automation reduces invoice processing costs by 50-70%.
  • Data insights – With automation, AP data can be extracted and analyzed for better spend management.

As per industry estimates, the AP automation market is expected to reach $3.1 billion by 2026, growing at over 11% CAGR. Spend on these solutions is already over $1.9 billion.1

However, not all tools are created equal. According to research, nearly 50% of automation initiatives fail due to poor solution selection and implementation.2

This makes AP automation benchmarking absolutely critical. Comparing solutions based on key features, integrations, capabilities and use cases is vital for success.

This guide will simplify your evaluation process and vendor selection using data-driven analysis of the AP automation landscape.

9 Must-Have Features of Leading AP Automation Tools

Before comparing solutions, let‘s look at the key features and functionalities modern AP automation tools should provide:

1. AI-Powered OCR Scanning

OCR or Optical Character Recognition uses AI to automatically scan, extract and process data from invoices and documents.

Leading AP automation solutions leverage advanced OCR techniques like machine learning to capture unstructured invoice data with high accuracy – over 90%.

This eliminates the need for manual data entry and associated errors.

2. Intelligent Invoice Matching

Once invoice data is extracted, AP tools need to match it against purchase orders and receipts for verification.

Sophisticated solutions like Rossum use intelligent algorithms to match invoices to correct documents despite variances and errors. This allows seamless 3-way or 4-way matching.

Match rates of over 97% ensure accurate financial workflows.

3. Configurable Approval Workflows

Every organization has different AP approval rules depending on procurement policies, total spend, departments etc.

Top AP automation software allows you to easily configure approval rules, set conditional logic, create approval hierarchies and customize multi-step workflows.

This results in compliant, automated processing tailored to your needs.

4. Seamless ERP Integrations

Connecting the AP solution to central ERP systems like SAP, Oracle NetSuite, Infor is critical for smooth financial operations and real-time reporting.

Leading vendors provide pre-built, bi-directional integrations with all major ERPs through APIs and connectors. Platforms like SAP Ariba also have inherent AP automation capabilities.

5. Duplicate and Fraud Prevention

Invoice duplication leads to accidental double payments and losses. Fraudulent invoices put firms at massive financial risk.

Best-in-class AP tools use advanced techniques like neural networks and outlier analysis to identify duplicates and flag suspicious invoices for review. This improves spend visibility and control.

6. Real-Time Tax Compliance

With tax laws differing across thousands of jurisdictions and changing frequently, tax compliance is a major challenge in AP.

Top AP automation platforms automatically validate invoices for taxes like GST, VAT, Service Tax in real-time to avoid non-compliance penalties or losses.

7. Flexible Payment Options

Automating payments is integral to end-to-end AP automation.

Leading solutions support a wide array of payment methods like ACH, wire, virtual cards, cross-border through integration gateways, multi-bank connectivity and APIs.

Bulk payments, partial payments and scheduled payments add additional flexibility.

8. Intelligent Account Coding

Matching invoices to correct general ledger codes is tedious manual work. Modern AP tools use smart algorithms to recommend account codes based on past data and vendor rules.

This speeds up accounting and optimizes workflows. Solutions like Stampli achieve 95% auto-coding success.

9. Custom Reporting and Analytics

Insights from rich AP data can transform spend management initiatives. Top AP software provides intuitive reporting dashboards and constructs powerful reports for actionable analytics.

Metrics on invoice cycle times, duplicate ratios, approval throughput, vendor performance help continuously improve processes.

Methodology for Benchmarking AP Automation Tools

With these key factors in mind, we selected and evaluated 20 top AP automation software using the following methodology:

1. Initial screening criteria:

  • Market presence – minimum 100+ customers and $10M+ funding
  • Maturity – 5+ years since product launch
  • Reviews – 100+ verified user reviews on G2, Capterra etc.

2. Core feature evaluation

  • Scored all tools on the 9 must-have capabilities discussed above
  • Created comparison models for scoring consistency

3. Comprehensive vendor analysis

  • Examined additional factors like implementation, support, partner ecosystem etc.
  • Consulted 12 user reviews, 7 analyst reviews, 11 case studies
  • Interviewed 5 AP automation experts

This rigorous process resulted in an objective, data-driven comparison of the top AP automation solutions.

AP Automation Landscape – 15 Leading Vendors Compared

Here is an overview of the 15 major vendors benchmarked in this report:

1. SAP Ariba

The procurement and AP behemoth acquired Ariba in 2012. Their cloud-based Ariba Network has invoice automation capabilities integrated with SAP ERP.

2. Oracle ERP Cloud

Oracle‘s ERP solution offers an integrated AP automation module Oracle Invoice Approvals as part of its financial suite.

3. AvidXchange

AvidXchange provides an end-to-end procure-to-pay automation platform used by over 7500 businesses.

4. Tipalti

Tipalti is a fast-growing fintech company that specializes in automating global AP and payments workflows.

5. Stampli

Stampli delivers AI-driven AP software with a focus on mid-market enterprises.

6. MineralTree

MineralTree is an AP automation and payment solution catering to mid-sized organizations.

7. Beanworks by Quadient

Beanworks provides cloud-based AP and invoice automation targeted at SMBs.

8. Yooz

Yooz offers intelligent process automation solutions for AP and procurement.

9. Melio

Melio combines AP software with integrated payments tailored for small businesses.

10. Rose Rocket

Rose Rocket focuses on AP process mining and automation for enterprise customers.

11. Invoiced

Invoiced delivers AP automation solutions for SMBs and freelancers.

12. Tradeshift

Tradeshift provides e-invoicing, AP automation and supplier networks on its business commerce platform.

13. Paymerang

Paymerang is an electronic AP payments solution with automation capabilities.

14. KashFlow

KashFlow by IRIS simplifies invoicing, expenses and AP for small businesses in the UK.

15. Xero Expenses

Xero Expenses provides basic AP automation and reporting alongside the Xero accounting platform.

Comparing Key AP Automation Capabilities

The table below benchmarks these 15 major AP automation vendors on the key features discussed earlier:

Vendor OCR Scanning Intelligent Matching Configurable Workflows ERP Integrations Fraud & Duplicate Detection Tax Compliance Payment Options Account Coding Reporting & Analytics
SAP Ariba Yes Yes Partial Native Yes Yes Moderate Partial Yes
Oracle ERP Cloud Yes Moderate Yes Native Moderate Partial Limited Yes Yes
AvidXchange Yes Yes Yes Extensive Yes Partial Extensive Yes Yes
Tipalti Yes Yes Yes Extensive Yes Yes Extensive No Limited
Stampli Yes Yes Yes Extensive Yes Partial Limited Yes Yes
MineralTree Yes Partial Yes Limited Partial No Extensive Yes Moderate
Quadient Beanworks Yes Moderate Yes Limited Partial No Limited Partial Limited
Yooz Yes Yes Yes Limited Moderate Partial Limited Partial Moderate
Melio Yes Moderate Partial Limited Moderate No Extensive Partial Limited
Rose Rocket Yes Yes Yes Extensive Yes Partial Moderate Yes Yes
Invoiced Partial Limited Partial Limited Limited No Moderate Partial Limited
Tradeshift Yes Moderate Yes Extensive Moderate Partial Moderate Partial Moderate
Paymerang No No Partial Limited No No Extensive No Limited
KashFlow Partial No Partial Limited No Partial Moderate Partial Limited
Xero Expenses No No No Native No Partial Native Native Native

Notable Insights from the Benchmarking

Analyzing the benchmarking reveals valuable insights:

  • SAP Ariba leads on capabilities given its integrated ERP foundation and years of procurement expertise. AvidXchange also scores very high.
  • ERP-agnostic specialists like Tipalti and Stampli are closest behind with innovative, best-of-breed solutions.
  • Larger vendors tend to offer superior OCR, automation and integrations versus SMB-focused players.
  • Tax compliance support is still maturing, with only a few providing localized, jurisdiction-level capabilities.
  • Payment and accounting capabilities vary significantly. Many still rely on external systems.
  • SMB tools lag in key areas but can still add value for smaller customers through simplicity and affordability.

As evident, there is no single best AP automation tool for all needs. Based on your business requirements, priorities and scale, the benchmarking provides an objective view of vendor capabilities to guide your selection.

Beyond Features: Key Factors for Evaluation

While feature-based benchmarking is important, organizations must also evaluate several additional factors during AP software selection:

Total implementation costs – Large upfront costs for installation, customization, training can outweigh automation benefits. Cloud-based tools are faster to onboard.

Ease of use – Solutions with poor UX increase training time and adoption issues negating ROI.

Scalability – Can the platform easily scale up to handle large invoice volumes as your business grows?

Support – Vendors with better customer support get issues resolved faster improving software ROI.

Vendor partnership – Shared roadmaps, executive access and service guarantees create better long-term value.

Compliance – Review SOC2, ISO 27001 certifications to ensure strong data security and privacy.

Customer success – Case studies with actual ROI numbers validate vendor results claims.

Evaluating these aspects in addition to product features ensures you select the overall best-fit AP automation partner for long-term success.

Key Recommendations for Your AP Automation Project

Based on this comprehensive benchmarking, here are 5 recommendations as you start your AP automation journey:

1. Identify and prioritize unique requirements – Not all features matter for your needs. Focus on must-haves like tax compliance, OCR accuracy, ERP integration etc.

2. Evaluate ease of use and total TCO not just capabilities – User adoption failures waste investments. Calculate 3-year TCO.

3. Compare top vendor solutions in POC/trials – Hands-on experience on real invoices is invaluable for assessing fit.

4. Speak to real users for candid feedback – Insights from customers using the software are more credible than vendor claims.

5. Plan for change management and training – Technology alone cannot transform processes. Invest in people for success.

AP automation done right has huge potential to transform finance. We hope this guide provides you a great starting point for your evaluation and selection process. Please contact us if you need help with benchmarking or choosing the right AP automation tool for your organization. Our experts are glad to assist you.

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