Key Challenges Faced Within Accounts Payable Teams

Accounts Payable (AP) Automation is not a new concept. Following the advent of Enterprise Resource Planning (ERP) in the 1990s, many organizations embarked on a journey of standardizing and automating their discrete back-office processes and re-engineering end-to-end processes.
As finance organisations continue to evolve, Accounts Payable (AP) teams face increasing pressure to improve efficiency, strengthen compliance, and support broader digital transformation initiatives. From navigating regulatory changes and emerging technologies to modernising processes and systems, AP leaders must address a complex set of challenges while delivering greater value to the business.

The following challenges highlight the key priorities shaping the future of AP:

1. Global eInvoicing Mandates

Governments worldwide are introducing mandatory eInvoicing regulations with varying formats, reporting requirements, and implementation timelines. AP teams must adapt quickly to remain compliant across multiple jurisdictions while maintaining efficient processing and avoiding financial penalties or operational disruption.

2. AI Expectations

Organisations expect AP teams to leverage AI to automate manual tasks, improve accuracy, accelerate invoice processing, and deliver actionable insights. However, many teams struggle with legacy systems, poor data quality, and limited resources, making it challenging to realise AI’s full potential while managing expectations for rapid transformation.

3. Increasing Compliance

AP teams face expanding regulatory requirements covering tax, fraud prevention, audit readiness, data privacy, ESG reporting, and financial controls. Keeping pace with evolving legislation across different countries requires robust governance, consistent processes, and reliable documentation, placing significant pressure on already stretched finance teams.

4. Shared Services Productivity

Shared Services organisations are expected to process higher transaction volumes with fewer resources while maintaining service quality. AP teams must eliminate manual work, standardise processes, improve visibility, and increase automation to achieve productivity targets without compromising compliance, supplier relationships, or employee satisfaction.

5. ERP Consolidation

Many organisations are consolidating multiple ERP systems following mergers, acquisitions, or global transformation programmes. AP teams must harmonise processes, migrate data, and maintain business continuity during complex implementations, while ensuring consistent controls, reporting, and supplier experiences across the new technology landscape.

6. Clean Core Strategy

As organisations adopt Clean Core strategies, AP teams must minimise ERP customisations and rely on standard functionality alongside integrated cloud applications. This requires rethinking existing processes, reducing technical debt, and ensuring future innovations can be adopted more quickly without disrupting core business operations.

Building the Right Technology Architecture for a Future-Ready AP Function

Many SAP customers have successfully completed their migration to S/4HANA. The next strategic decision is not about ERP – it’s about which business capabilities should remain inside ERP, and which should become specialist platforms.

Accounts Payable is one of the first areas where organisations are asking this question.

Accounts Payable teams are under increasing pressure to improve efficiency, enhance supplier experiences, strengthen compliance, and adopt new digital capabilities. Achieving these goals requires careful consideration of technology architecture – particularly the relationship between AP processes, ERP platforms, and specialised automation solutions.

Rather than simply asking where AP should sit, organisations must determine the right balance between core ERP functionality and flexible innovation platforms.

Should invoice processing remain inside ERP?

Traditionally, invoice processing has been embedded within ERP systems to provide control, visibility, and integration with financial processes. However, as invoice volumes increase and automation expectations grow, organisations should consider whether ERP alone can deliver the agility and innovation required.

Keeping invoice processing within ERP can provide strong governance, seamless integration with financial data, and simplified ownership. However, highly customised ERP workflows can create complexity, slow innovation, and increase dependency on ERP release cycles. Many organisations are now adopting a hybrid approach, where core financial controls remain within the ERP while specialised AP capabilities enhance automation, intelligence, and user experience.

Should AP innovation be decoupled from ERP upgrades?

ERP transformation programmes often take years to complete, while AP teams need continuous improvements in automation, compliance, and supplier engagement. Relying entirely on ERP upgrades to deliver AP innovation can limit agility and delay value.

Decoupling AP innovation from ERP upgrade cycles allows organisations to adopt new technologies – such as AI-powered invoice automation, advanced analytics, and intelligent workflow capabilities – at the pace the business requires. A modular architecture with well-defined integrations enables AP teams to innovate independently while maintaining alignment with the broader ERP strategy.

What belongs in SAP S/4HANA?

For organisations using SAP S/4HANA, the ERP should remain the system of record for core financial processes and controls. Capabilities that require strong financial governance, transaction integrity, and integration with accounting processes are typically best managed within S/4.

This includes areas such as supplier master data governance, accounting postings, payment execution, tax determination, financial controls, and reporting. Keeping these capabilities within the ERP ensures consistency, auditability, and alignment with enterprise-wide finance operations.

What belongs outside SAP S/4HANA?

Not every AP capability needs to reside within the ERP. Solutions that require rapid innovation, specialised functionality, or frequent updates may be better positioned outside S/4 while integrating seamlessly with core finance processes.

Examples include intelligent invoice capture, AI-driven document understanding, supplier collaboration portals, workflow optimisation, analytics platforms, and emerging automation technologies. By extending rather than heavily customising the ERP, organisations can maintain a cleaner core while benefiting from faster innovation and easier adoption of new capabilities.

Creating the right balance

The most effective AP technology architecture is not about choosing between ERP and external solutions – it’s about defining the right responsibilities for each. A well-designed ecosystem allows the ERP to provide stability, control, and financial integrity, while enabling specialised platforms to drive automation, intelligence, and continuous improvement.

By making deliberate architecture decisions, AP teams can build a future-ready operating model that supports efficiency today while remaining adaptable to tomorrow’s regulatory, technological, and business demands.

What can be achieved with true Automation?

The business case for driving AP automation include both hard and soft benefits to business. By adopting best-in-class invoice ingestion and processing capability, organizations can achieve significant financial and efficiency savings.

How AI and Machine Learning Are Enabling Touchless Invoicing

Accounts Payable teams are increasingly moving towards touchless invoicing, where invoices can be captured, processed, validated, and paid with minimal human intervention. Artificial intelligence (AI) and machine learning (ML) are accelerating this shift by improving decision-making, automating complex tasks, and enabling AP operations to become more proactive and intelligent. The following capabilities are helping organisations transform invoice processing from a transactional activity into a strategic, data-driven function.

AI-assisted coding

AI-assisted coding uses machine learning models to analyse invoice data, historical transactions, and business rules to automatically suggest or apply accounting codes. By learning from previous coding decisions, AI can improve accuracy, reduce manual effort, and accelerate invoice approvals. This enables AP teams to handle higher volumes while maintaining consistency and compliance across financial processes.

Prescriptive analytics

While traditional analytics explain what has happened, prescriptive analytics uses AI to recommend what should happen next. For AP teams, this can include prioritising invoices, identifying optimal approval paths, and recommending actions to improve process performance. These insights help organisations proactively manage workflows, improve efficiency, and make better operational decisions.

    Predictive payment risk

Machine learning can analyse payment patterns, supplier data, invoice behaviour, and external factors to predict potential risks before they occur. AP teams can identify duplicate invoices, potential fraud, supplier payment issues, or cash flow risks earlier. These predictive capabilities strengthen controls while helping organisations optimise working capital and supplier relationships.

AI-generated workflow recommendations

AI can analyse process performance and recommend improvements to invoice workflows, approval routing, and resource allocation. By identifying bottlenecks, unnecessary steps, or inefficient approval paths, AI helps AP teams optimise operations continuously. These recommendations enable organisations to create smarter workflows that adapt to changing business needs.

   Autonomous exception resolution

Exceptions are one of the biggest barriers to achieving touchless invoicing. AI can identify the root cause of invoice issues, recommend corrective actions, and in some cases resolve exceptions automatically. By analysing historical resolution patterns and applying predefined rules, AI reduces manual intervention, shortens processing times, and allows AP teams to focus on more complex issues requiring human judgement.

Natural language AP queries

AI-powered natural language interfaces allow users to interact with AP systems using simple questions rather than navigating complex reports or screens. Finance teams can ask questions such as invoice status, payment timing, supplier trends, or outstanding liabilities and receive immediate answers. This improves visibility, reduces reliance on manual reporting, and enables faster decision-making.

Continuous learning

A key advantage of AI and machine learning is the ability to continuously improve over time. As more invoices are processed and more decisions are made, AI models learn from outcomes and refine their recommendations. This creates a self-improving AP environment where automation accuracy increases and manual intervention gradually decreases.

AI and machine learning are redefining what is possible in accounts payable by moving beyond automation towards intelligent, autonomous invoice processing. While human oversight remains essential for governance and strategic decisions, AI enables AP teams to achieve higher levels of efficiency, accuracy, and control – creating a more agile and value-driven finance function.

Enterprise AP Automation Options for SAP ERP Customers

There are a number of leading Accounts Payable (AP) automation solutions available, each offering distinct capabilities and considerations. To support an informed comparison, we have evaluated SAP’s AP automation offerings and Basware, the market-leading best-of-breed solution, against nine key criteria.

This comparison provides a structured view of their respective strengths and capabilities, helping organizations identify the solution that best aligns with their business requirements and strategic objectives.

Green = Strong Fit        Amber = Partial Fit        Red =  Poor Fit

Assessment is based on native product capability available at the time of writing. Capabilities requiring significant custom development, SAP BTP, SAP Build, SAC or third-party software are not considered native unless explicitly stated.
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