How to Determine Your Accounts Payable Automation ROI

Accounts payable (AP) process automation brings numerous benefits, from reducing manual workload to increasing accuracy and control over spending. While the operational improvements are evident, finance leaders still need to quantify the actual value of these changes. Understanding the ROI is crucial, not only for justifying the initial costs but also for building a case for continued investment in digital transformation. 

According to a 2024 report by Ardent Partners, top-performing teams process invoices at an average cost of $2.00 per invoice, compared to over $10.00 for less automated counterparts — a fivefold difference that highlights just how significant the efficiency gains can be. 

For organizations investing in more innovative processes, calculating accounts payable automation ROI goes beyond simply comparing costs. It involves looking at time savings, error reductions, and improvements in supplier relationships, all of which contribute to long-term financial health. By focusing on measurable outcomes, businesses can move past surface-level metrics and gain real insight into the full impact automation has on their bottom line.

Let’s explore the main factors that impact AP automation ROI and break down the process of determining the effectiveness of your workflows.

Key highlights:

• Calculating accounts payable automation ROI requires a holistic approach that includes the analysis of both direct savings, like labor and error reduction, and indirect benefits, such as improved cash flow management and stronger supplier relationships.
• Factors like organizational readiness, existing technical infrastructure, and vendor engagement all play a vital role in shaping the effectiveness and financial return of AP automation.
• Prioritizing solutions with built-in analytics, supplier self-service, flexible workflows, and proactive change management ensures sustained efficiency and ongoing ROI growth.
• With its native embedding in Microsoft Dynamics 365, advanced invoice matching, and compliance-ready features, ExFlow helps businesses unlock faster processing, clearer visibility, and diminished processing error rates.

Main Factors that Influence AP Automation ROI

When attempting to determine the ROI of accounts payable automation, you should consider not only software features but the complete ecosystem surrounding your processes. Everything from your company’s internal readiness to external vendor relationships play a part in determining whether the solution will deliver meaningful returns. 

Let’s look at the four core factors that can either amplify or hinder your AP automation ROI:

1. Business Environment Factors

The broader environment in which your business operates can significantly influence the success of your AP automation initiative. Regulatory landscapes, market volatility, and internal risk appetite all play critical roles in shaping outcomes. Companies operating across multiple jurisdictions, for example, have to account for varying and rapidly changing tax compliance and mandates, such as those enforced through Pan-European Public Procurement On-Line (PEPPOL). 

External pressures, such as rising interest rates or supply chain disruptions, make cost control and cash flow visibility even more crucial. Automation can help mitigate these risks, but only if your environment supports responsive, streamlined processes.

• Regulatory complexity impacts compliance automation gains.
• Economic volatility increases the value of real-time insights.
• Multi-entity or multinational structures raise integration needs.
• Leadership’s appetite for digital investment affects scaling potential.
  

  2. Technical Infrastructure

Your existing technical foundation will either accelerate or limit the effectiveness of AP automation. Organizations already operating on modern cloud-based ERPs (such as Microsoft Dynamics 365) are better positioned to integrate advanced tools and take advantage of real-time data exchange. 

On the other hand, legacy systems with fragmented data architectures often require costly and time-consuming custom integrations. Compatibility with e-invoicing networks, approval workflow customization, and scalability all depend heavily on a stable, flexible technical backbone.

• Modern ERP systems enable faster deployment and real-time insights.
• Built-in solutions reduce upfront implementation effort.
• Data quality and accessibility impact automation accuracy.
• Scalable infrastructure supports future growth and compliance needs.
  

  3. Process Maturity

The maturity of your current accounts payable workflow processes directly affects the potential return you will get from automation. Companies with clear, documented processes and established approval hierarchies will typically experience much smoother rollouts. In contrast, organizations with informal, manual processes may need first to invest time in process mapping and standardization. 

Process maturity also includes how well your team manages exceptions, handles supplier communications, and monitors cash flow. Mature processes lead to higher touchless invoice rates, faster cycle times, and fewer downstream corrections, all of which are critical for maximizing ROI.

• Defined workflows improve automation alignment.
• Strong exception management reduces manual interventions.
• Transparent approval chains speed up processing.
• Supplier self-service portals enhance efficiency and visibility.
  

  4. Vendor Ecosystem

Your supplier network and technology partners are pivotal in achieving meaningful accounts payable automation ROI. A solution is only as effective as the ecosystem it connects to, and this includes your supplier onboarding rates, their invoicing capabilities, and the responsiveness of your tech vendors. 

Close collaboration with suppliers can accelerate the adoption of electronic invoicing and reduce errors. Additionally, working with a vendor that offers industry-specific expertise and local compliance knowledge ensures you stay ahead of evolving regulatory requirements.

• High supplier onboarding rates increase automation impact.
• Vendor compliance with regional regulations reduces risk.
• Strong vendor relationships accelerate issue resolution.
• Access to shared innovation drives continuous improvement.
  

How to Measure the ROI of AP Automation

AP ROI calculation requires a comprehensive approach that looks beyond immediate cost savings. While the direct benefits, such as reduced labor and fewer errors, are easy to quantify, the indirect gains are equally valuable in driving long-term efficiency and financial health. 

By assessing both tangible and less obvious returns, finance leaders can build a complete picture of automation’s impact on operational performance and the bottom line. Let’s examine the specific direct and indirect factors to include in your ROI calculation.

Direct Benefits

Implementing AP automation brings immediate, measurable cost savings that make a compelling case for investment right out of the starting gate. These direct benefits typically appear quickly after deployment and have a clear impact on reducing operational expenses. 

Quantifying them is often the first step in demonstrating ROI-focused automation to internal stakeholders and leadership teams. For example, Infosys BPM reports that automated accounts payable systems improve invoice processing efficiency by increasing accuracy rates to 99.5%. This eliminates common errors, such as duplicate payments or mismatched data, which are prevalent in manual systems and cost businesses thousands annually. Other benefits include:

 

• Labor Expense Savings: By automating manual data entry, invoice matching, and approval routing, organizations significantly cut down on labor hours. Teams can focus on higher-value tasks instead of repetitive processing, which translates directly into payroll savings and productivity improvements.
• Reduced Paper and Storage Costs: Going digital eliminates the need for paper invoices, physical storage, and document handling. This saves not only the costs of printing and archiving but also the administrative time spent managing physical records.
• Fewer Errors and Duplicate Payments: Automation reduces human error in data entry and validation, decreasing the risk of costly duplicate payments or missed invoices. Fewer errors mean less time spent on corrections and reconciliations.
• Reduced Late Payment Fees: With automated reminders and faster processing cycles, businesses can avoid late payments and the penalties that ensue. This also supports better relationships with vendors and protects against reputational risks.

• Cost reductions in Invoice Processing: Research from SG Analytics highlights that robotic process automation (RPA), which includes accounts payable automation, can reduce invoice processing costs by up to 80%. This reduction stems from eliminating manual tasks, minimizing errors, and streamlining workflows, thereby boosting operational ROI across industries.

Indirect Benefits

Beyond immediate savings, automation also delivers long-term strategic advantages that elevate operational performance and decision-making. These indirect benefits often unfold over time but are crucial for maximizing ROI and sustaining growth in a dynamic business environment.

• Improved Cash Flow Management: Automation provides real-time visibility into payables, helping finance teams plan disbursements more effectively. Better cash flow management supports working capital optimization and reduces reliance on short-term borrowing. 
• Enhanced Vendor Relationships: Reliable, on-time payments strengthen supplier trust and can lead to preferential terms or early payment discounts. A smooth AP process demonstrates professionalism and nurtures long-term partnerships.
• Better Data for Decision-Making: Digital processes create rich data trails that can be analyzed for insights into spending patterns and supplier performance. Improved data quality enhances forecasting and supports smarter financial strategies.
• Improved Internal Controls: Automated workflows introduce checks and balances that strengthen compliance and audit readiness. With clear invoice approval trails and automated reporting, organizations reduce the risk of fraud and enhance governance.

Four Steps of AP ROI Calculation

Calculating AP automation ROI requires more than just a rough estimate of time savings. A structured approach helps build a convincing case for leadership, showing hard numbers and potential efficiencies. 

Let’s walk through a simple scenario to bring this to life: imagine a mid-sized company processing 12,000 invoices per year, while managing AP manually. We’ll apply this scenario to each step to demonstrate how you can calculate the impact of automation in your own organization.

Step 1: Determining Current Costs

The first step in calculating your ROI is understanding your baseline. You’ll need to include all direct AP processing costs:  labor hours, paper handling, storage, and error corrections. For this hypothetical company, with an average cost of €10 per invoice, the annual spend is approximately €120,000. Don’t forget to include hidden costs like time spent chasing approvals or reconciling errors.

What to include in your breakdown:

• Labor: Calculate hourly rates × time per invoice
• Supplies: Paper, printing, postage
• Storage: Filing cabinets, archive fees
• Error management: Time and resources spent fixing mistakes

Step 2: Estimating Potential Savings

Next, estimate the expected savings from automation. Based on benchmarks, AP automation can reduce invoice processing costs by up to 70%, lowering the cost to around €3 per invoice. For our company, that means potential savings of approximately €84,000 annually. Include reductions in labor, paper, storage, and error management — plus potential early payment discounts.

Your estimate should include the following:

• Labor reduction as a result of faster processing with automated workflows
• Paperless savings realized by eliminating printing and postage
• Error prevention gains due to fewer duplicate or late payments
• Early payment discounts earned through improved management

Step 3: Calculating Net Savings

Now, subtract any implementation and licensing costs from your potential savings to find your net savings. Suppose our automation solution costs €25,000 per year; that brings our net savings to €59,000 annually. This is where your accounts payable automation ROI really begins to take shape in tangible numbers.

Your calculation needs to include:

• Annual subscription or license fees
• Implementation or onboarding costs
• Support and maintenance fees
• Total annual operational savings

Step 4: Applying the ROI Formula

Finally, apply the classic ROI formula to complete your analysis. ROI is typically calculated as:

ROI = (Net Savings ÷ Investment Cost) × 100

For our example: ROI = (€59,000 ÷ €25,000) × 100 = 236%

A return of over 200% is compelling evidence of the impact accounts payable automation ROI can deliver. With this formula, you can clearly communicate both the efficiency gains and financial justification to your leadership team.

Your formula should include:

• Net savings from Step 3
• Total investment (software + implementation)
• Multiply by 100 to express as a percentage

Ensuring ROI-Focused Automation for Your Accounts Payable

Achieving meaningful AP automation ROI isn’t just about deploying software — it’s about how you prepare your organization and sustain improvements over time. Even the most advanced automation tools require thoughtful planning, alignment with your business goals, and engagement across teams. By following these strategies, you can maximize the impact of your AP automation initiative and deliver real value to your organization.

Assess Your Organizational Readiness

Before implementing automation in your AP department, it’s essential to take an honest look at your organization’s current state. Understanding your existing processes, pain points, and level of digital maturity will help you choose the right solutions and set realistic expectations for outcomes. 

Start by mapping out your current invoice workflows and identifying bottlenecks, such as manual approvals or inconsistent supplier submissions. Evaluate your team’s familiarity with digital tools and assess any internal resource gaps.

Key areas to assess include:

• Current invoice volume and processing times
• Dependence on manual workflows
• Data quality and accessibility
• Staff readiness for adopting new tools

Select the Right Solution

Choosing an AP automation solution isn’t merely a technical decision; it’s also a strategic one. The right platform should align with your organization’s specific needs, scale with your growth, and support compliance requirements within your operating regions.

Look for solutions that are natively built into your existing financial systems, but also focus on features that add genuine value, like real-time reporting and fraud prevention. Always involve cross-functional teams in the selection process to ensure broad alignment and buy-in.

When evaluating solutions, consider:

• Compatibility with your ERP and financial tools – purpose-built solutions are ideal
• Supplier onboarding support and compliance capabilities
• Reporting and analytics features for better visibility
• Vendor reputation and customer support quality
  

Ensure Best Practices

You need more than just deployment to unlock full value from AP automation. You need disciplined practices that sustain efficiency gains. Establish clear approval hierarchies and escalation paths to minimize delays. Standardize supplier onboarding procedures and promote e-invoicing adoption to increase automation rates. Finally, set up regular audits and performance reviews to track process improvements over time and adjust as necessary.

Best practices to implement include:

• Standardized processes and approval workflows
• Proactive supplier engagement for electronic invoicing
  Regular process reviews and KPI tracking
• Training programs to maintain team competence
  

Apply Change Management

Introducing AP automation represents a significant shift for many teams, especially if they are moving from manual processes. Effective change management is crucial to ensure a smooth transition and to secure long-term success. 

Start by communicating the “why” behind the change; emphasizing the benefits for both the organization and individual team members. Provide ample training and create feedback loops so employees feel heard and supported throughout the rollout.

Consider the following change management essentials:

• Clear communication of project goals and expected benefits
• Hands-on training sessions for all impacted teams
• Ongoing support channels for questions and troubleshooting
• Recognition of early adopters and process champions

Increase Your AP Automation Return on Investment with ExFlow for D365

When it comes to achieving maximum accounts payable automation ROI, selecting a solution that works with your ERP, rather than alongside it, is critical. ExFlow for Microsoft Dynamics 365 Finance & Operations and Business Central is a purpose-built AP automation solution that’s natively embedded in the Microsoft ecosystem. 

Your finance teams can manage the entire invoice-to-payment workflow within the familiar environment of D365, reducing complexity and boosting efficiency from day one. ExFlow delivers powerful features that help organizations accelerate their return on investment:

• End-to-End Visibility Across AP Processes: ExFlow provides full transparency over every step of the AP workflow, from invoice data capture to final payment. Real-time dashboards and reporting empower finance leaders to track KPIs, monitor cash flow, and make data-driven decisions with confidence.
• Advanced Invoice Matching and Automation: With built-in logic for matching invoices against purchase orders and goods receipts, ExFlow minimizes manual touchpoints and reduces the risk of errors. High straight-through processing rates contribute directly to lower processing costs and faster cycle times.
• Regulatory Compliance with EU and Global Regulations: ExFlow supports e-invoicing standards like PEPPOL and ensures adherence to regional tax compliance requirements. This helps organizations mitigate risks and avoid costly fines associated with manual compliance errors.
• Streamlined Approval Workflows: Automated routing of invoices to the appropriate approvers speeds up the approval cycle and prevents bottlenecks. Flexible approval hierarchies support complex organizational structures without slowing down processing times.
• Scalable Architecture for Growing Workloads: Whether processing thousands or millions of invoices, ExFlow scales effortlessly to meet organizational demands. Its robust architecture ensures consistent performance as businesses expand, mergers occur, or invoice volumes increase, protecting AP automation ROI in both the short and long term.
• Embedded Analytics for Continuous Improvement: Access to granular process data enables ongoing refinement of AP workflows. Finance teams can identify inefficiencies, monitor exception handling, and continuously optimize their operations for even greater ROI.

Book a demo today and explore how ExFlow can help increase the ROI of your AP automation investment.

Frequently Asked Questions

How Can I Improve My AP Automation ROI?

Improving your AP automation ROI starts with understanding your current process gaps and aligning your automation goals to address them directly. Focus on eliminating manual touchpoints, increasing straight-through processing rates, and engaging your suppliers early to boost electronic invoicing adoption. 

Regularly monitor your AP metrics, such as processing times and error rates, to identify further opportunities for refinement. Finally, invest in staff training and change management to ensure your team uses the automation tools to their full potential.

How Does the Right Software Maximize the ROI of Automation Investments?

The right AP automation software maximizes automation return on investment by aligning closely with your organization’s existing workflows and systems, reducing the need for external integrations and minimizing learning curves. Solutions that offer real-time visibility, flexible workflow automation, and compliance support help lower operational costs and improve cash flow management. 

Additionally, software that provides actionable insights through embedded analytics empowers finance teams to continuously optimize their processes, leading to sustained efficiency gains and a faster return on investment.

What Features Should I Look for When Selecting a Software Solution to Manage My AP Automation?

When choosing an AP automation solution, prioritize features that support end-to-end process control and scalability. Look for purpose-built inclusion within your ERP system, advanced invoice-matching capabilities, and compliance support for regional regulations like PEPPOL. 

User-friendly dashboards and supplier self-service portals improve visibility and reduce administrative burden. Integrated analytics and reporting functions are equally essential because they help you track performance and drive continuous improvement over time. The goal is to select a solution that not only meets your immediate needs but grows alongside your business.