What Are the Differences Between Electronic Invoice Processing Solutions, and AP Automation Software?

As finance teams across the globe have started exploring automated invoice processing, they come across various terminologies that may seem complicated. This is because of the different invoice formats and names. This article will help clear any confusion you may have.

Electronic invoicing

The process of electronic invoicing is digitizing all invoices. These could be in any format (XML, EDI, PDF). This digitizing is done to make the data available for the electronic invoice software. Electronic invoice processing is also referred to as accounts payable automation (AP automation). Both terms mean the same thing – automating accounts payable processes.

Difference between different electronic invoice processing software

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The world of AP automation is very competitive. Different solutions are available for various needs. Some are for smaller businesses that only need digitization of their data. Others are for larger enterprises, where the system becomes more streamlined.

These processes are especially helpful for larger businesses because of various tax codes, payments to different countries, as well as complex approvals. An automated invoice processing system can make a difference to such businesses. Automation helps match invoices with purchase orders so the entire process can be completed within minutes.

On-premise or cloud

On-premise invoice processing software requires installation of the software onsite. This software then has to be managed by the IT team of the business. Cloud-based systems are an excellent choice because businesses receive software updates automatically without any human intervention from their end.

How to choose the best invoicing solution?

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When looking for an automated invoice processing system, these are a few features you should look for.

Data capture

The automation tool should capture invoices received in the mail (paper) and received via email. It should convert these invoices into digitized data for the convenience of computation.


The software should have a central dashboard where invoices can be viewed as per their status. It should also flag invoices needing attention. It must also have an approval workflow, as with manual processing. This can be done by setting up user access within the software.


As mentioned above, the software needs to have the capability of building a custom approval workflow. Admins should have the ability to drag and drop custom boxes and design the workflow as per their business needs.

Purchase order

The software requires the capability of capturing purchase orders and comparing them within the system. Every purchase order should have a matching invoice. This should take place in the background and matching should happen within minutes of receiving a purchase order.


Most businesses dread audits because keeping track of paper trail is not that simple. With the help of the right automation software, you can now keep track of all your transactions. Paid invoices can be stored in an archive for easy access and there should be a search functionality to help look for past invoices quickly.

Benefits of automated accounts payable software

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Saves time

One of the biggest benefits of an automated accounts payable solution is saving time. These solutions help process and approve invoices faster and that too without errors.

Streamlined processes

Another benefit of automated software is it helps streamline business processes. It helps flag problems with invoices that the naked eye would have missed. This includes overpayment errors, duplicate payments, and flag exceptions.

Real-time monitoring

All businesses must keep track of their money at all times. This is where automated software comes into the picture. All invoices are available at a glance and the finance team can see the statuses of all of them at a single glance.

Custom solutions

The top accounts automation software provides custom solutions for businesses. Business owners can now design the software as per the accounts team’s needs. This helps eliminate the need for extensive training and the team can work on an interface similar to what they’re used to.


It all comes down to the volume of services and invoices. As a business owner, you need to find a solution that’s right for you. You may only need digitizing or you may need the entire package. Everything depends on what streamlines your process better.

Radulovic Jovica
Radulovic Jovica

I started my career at websta.me following the completion of my studies in Agricultural Economics at the University of Belgrade. My fascination with this field arose from recognizing the pivotal role marketing plays in companies' business strategies.