Let’s Get Digital: How to Build a Paperless Accounts Payable Process

It doesn’t matter if you’re a hospital system, a chain of restaurants, a manufacturer or a multi-national corporation — accounts payable (AP) processes that are either partially or fully dependent on paper are a giant ball and chain hobbling your efficiency, profitability and — let’s be honest — your sanity.

• Need to find an old invoice? Have fun rifling through drawer after drawer of file folders.
• Looking for a communication chain between your company and your supplier, but the only place that information lives is in Gladys’s inbox and she’s on vacation? Guess you’re stuck waiting until she gets back.
• Need manager approval to pay an invoice, but Tom is out sick? Welp, sucks to be you.
• Boss is breathing down your neck to pull together some numbers for a report that’s due to the C-suite? Great — now you have to drop what you’re doing to track down that information.
• Supplier calling for the third time wondering if they’re ever going to get paid? Time to get your exercise for the day as you run from desk to desk to figure out why that invoice is stuck in limbo.

None of that sounds like any fun. Yet that’s the reality in organizations that doggedly cling to old-fashioned ways of doing AP. The two biggest challenges in the AP process are too much manual data entry followed closely by data errors and discrepancies. Those challenges mean it takes longer to process and pay invoices. In fact, 63% of companies spend more than 10 hours a week processing invoices and 67% spend 5 or more days a month processing invoices.¹

What happens when AP processes are slow and labor intensive? Your team and your business suffer. 78% of companies cite poor AP processes as a key stressor and 26% say their current process is NOT scalable if invoice volumes suddenly increased. And only about half (49%) are confident their current AP systems meet their industry’s data retention and audit requirements¹ — because failing an audit is a blast, right?

So if you’re among the 61% of organizations without fully digitized AP processes and documentation and are tired of death by a thousand paper cuts, it’s time to get serious about going paperless.

What does it mean to have a paperless accounts payable process?

Paperless accounts payable means your AP process no longer involves paper documents (paper POs, paper invoices, paper checks, etc.) and the time-consuming, error-prone manual work they require. Invoice receiving, invoice processing, approvals and payments are all conducted digitally within a single, purpose-built platform that integrates with your ERP system.

Paperless AP platforms incorporate powerful technology such as:

• AI-driven automation for:
  • Extracting information from invoices and entering it into the correct data fields
  • Matching invoices to purchase orders and goods receipts
  • Routing invoices through approval workflows
• Cloud storage that keeps all AP-related documentation centralized, archived and easily searchable
• Multiple electronic payment options and integration with supplier accounts receivable portals

How to create a paperless accounts payable process

Remember the nightmare of paper AP processes we talked about in the introduction? Now imagine if your AP process looked like this instead (which it can if you use Esker Accounts Payable).

Steps to a paperless AP process

Invoice receipt

Invoices arrive electronically via email or supplier portals. AI technology separates batched invoices, accurately extracts data from each invoice, recommends the correct coding for any non-PO invoices and conducts three-way matching.

Non-compliant invoices or invoices containing unusual quantities or costs are flagged for further review, decreasing the risk that you might make erroneous payments.

Approval

Invoices are automatically routed to the correct approvers, and regular reminders ensure approvers don’t forget about them. If an approver is out of the office, they can approve invoices via a mobile app. If an approver is on vacation or extended leave, a different approver can be added to the workflow.

Recurring invoices and invoices from specific suppliers can even be set up for touchless processing with automatic approval.

Payment

Make secure digital payments (both domestically and internationally) from one screen, more easily taking advantage of early payment discounts and dynamic discounting from your suppliers.

Archiving

All invoices and documents are stored electronically in a centralized cloud-based system, making them easy to search and access. Integration with your ERP environment ensures everything in your AP process is replicated to your ERP master data.

Visibility

Anyone on the AP team can communicate internally with fellow staff or externally with suppliers within a paperless platform — and it’s all accessible to anyone working on that specific invoice or account.

Need hard numbers to show the c-suite? Track your AP team’s processing performance and company cashflow with real-time monitoring displayed on customizable dashboards and easily exportable as reports.

I don’t know about you, but I’m picking the paperless process every time. So how do you actually go about creating a paperless AP process at your organization? 

Understand & evaluate your existing AP process

It doesn’t matter if you use thumbtacks and string, pen-and-paper or fancy visualization software — map out everything that happens in your current workflow from start to finish. What upstream inputs are causing problems for your team? Where are the bottlenecks? Which KPIs aren’t where they should be? What pain points are keeping you up at night?

If you aren’t already, start tracking baseline metrics such as cost per invoice, time to process, invoices processed per person, invoices linked to a PO, etc. (If you want a deeper dive into AP KPIs, definitely check out our ebook: 10 Accounts Payable KPIs You Should Be Measuring). Doing this before you transition will allow you to see how your process efficiency and accuracy improves after you become paperless.

Determine how you want to improve your AP workflows

Transitioning to a paperless process is a good time to make improvements to your AP workflow. After all, digitizing a bad process just means you’ll have a bad process that’s no longer using paper. What do you wish your AP process looked like? Map it out. Then compare it to your current process and identify ways you can more closely align your current process to your desired process.

Select a paperless partner

Choosing a platform that has the functionality you need is important, yes, but choosing the right provider is just as important. You want a partner who will support you at every step in your transition to paperless and continue to grow with you. When evaluating paperless AP solutions, look for providers that deliver:

• Industry experience: Is the provider a leader in AI and machine learning capabilities? Can they easily integrate with even complex ERP environments?
• Customization & flexibility: Do they provide continuous customer support and training to ensure a successful transition? Can their tools adapt to meet your specific business requirements?
• Security & compliance: Does the provider have appropriate protocols around data security? Are they in compliance with national, international and industry regulations?

Digitize your documents & supplier payments

Pull open those file drawers and start scanning any paper documentation you need to save. Set up a secure digital repository for your newly digitized documents, establish a clear naming convention for all files and implement data indexing to make your files easy to search. This will create a strong foundation for your paperless platform to draw information from.

In addition, start getting away from paper checks and paying your suppliers through electronic means, such as ACH, wire transfers, virtual cards or other methods. Work with your suppliers to determine their preferences for being paid electronically. 

7 benefits of moving to a paperless accounts payable process

Cost savings

It costs $12.42 to process an invoice using traditional methods compared to just $2.65 for best-in-class teams leveraging automated, paperless processes.² That’s a more than 75% cost reduction per invoice!

But that’s not the only way going paperless saves you money. You’ll also experience:

• The end of paper document storage expenses
• Lower labor costs thanks to a reduced need for manual data entry
• Fewer error correction expenses because of improved accuracy
• Fewer late payment penalties and more early payment discounts due to faster processing
• Happier suppliers because you’re able to consistently pay your bills on time

BONUS: Getting rid of paper not only lowers your costs, it reduces harmful impacts on the environment — making your company a more sustainable business that can attract more suppliers and customers.

Speedy processing

Say goodbye to bottlenecks and backlogs. With your paperless AP platform handling data entry and document routing, your invoice processing cycle time could shrink to 3 days — versus the 13 days it typically takes when using manual methods.² Wow!

Amazing accuracy

AP is the last checkpoint before money leaves your company. And once that money leaves, it’s gone. So making sure the correct amount goes to the correct place is super important.

A paperless AP platform can catch errors, validate information and doesn’t make typos. That means your organization is less likely to make overpayments, make duplicate payments or fall victim to fraud attempts. Manual invoice processing has error rates of 3-8%. Meanwhile, paperless, automated systems can reach accuracy rates of 95-99%.³

Stronger compliance

In a paperless, automated AP process, fewer human touch points means fewer chances for human error or fraud. It gives you greater control over who has access to and editing rights for documents. And it allows you to more easily ensure segregation of duties within the AP team. In addition, a digitized AP process provides audit trails for every invoice and approval.

Real-time visibility & comprehensive reporting

You can’t truly manage something if you can’t measure it. When all of your AP activities are digitized and centralized in a paperless AP platform, tracking your team’s performance, spotting areas for improvement and proving your team’s impact on the organization’s profitability is much easier. This level of transparency also supports more accurate cashflow forecasting and better working capital management.

Customizable dashboards allow you to select which KPIs you want watch, and you can create and run reports with just a few clicks.

Satisfied suppliers

When your AP processes are running smoothly on a paperless platform, that means invoices are processed quickly, your suppliers get paid on time (or even early) and the number of disputes or late payments goes down. Know what else it means? Suppliers who are more willing to give you better contract terms, priority on orders and early payment discounts. Everyone wins!

Happier AP team

Releasing your AP staff from paper imprisonment sets them free from the drudgery of entering data and routing documents. Instead, they can focus on handling exceptions, maintaining good rapport with suppliers and taking on more strategic, higher value tasks. In other words, less menial work, more meaningful work.

Collaborating with other departments is also much easier when your AP process is paperless. Say the Procurement team got a question from a vendor about an unpaid invoice. That team can access the AP platform and quickly see exactly where the invoice is in the payment cycle and what (if anything) is holding up payment.

Paperless AP systems are also much better suited for remote or hybrid work, meaning your AP team no longer needs to be chained to their desks every day. Is someone on the team home with a sick kid? They can just log in from their home office and keep working. Is a key employee away on vacation? Someone else can easily take over their tasks because everything is digitized and accessible within the paperless platform. (Bonus: offering hybrid or fully remote work helps you attract and retain great AP talent).

AP staff can focus on exception handling and strategic tasks rather than spending time on data entry and document routing.

How Esker Accounts Payable enables paperless AP

Esker’s cloud-based accounts payable platform automates every phase of AP invoicing — from receiving the original document all the way to creating an entry in your ERP system — eliminating paper, minimizing manual touch points and helping your team work smarter, not harder.

Had enough of AP processes that suck the life out of your team? Take the first step towards a paperless future by watching a digitized, automated AP system in action in this 3-minute video.

Sources
1 IOFL: Accounts Payable Automation Trends 2025
2 Ardent Partners: The State of ePayables 2025
3 CFO Tech: Automated Invoice Processing: Benchmark Metrics for 2025 Success