AP automation vs hiring another accounts payable employee

1. Find the constraint before choosing the solution

Start with a representative month of supplier invoices. Record how many arrive, where they arrive, how many pages or lines they contain and how often they need purchase order matching. Follow a sample from receipt to posting and payment. The purpose is not to create a perfect time study. It is to see where work waits, repeats or requires judgement.

If the team spends most of its time downloading attachments, entering header fields, checking duplicates, copying coding, sending reminders and rekeying approved bills, the constraint is repetitive processing. Adding a person increases capacity, but it also preserves the work that created the shortage. Automation is likely to address the cause more directly.

If time is dominated by disputed deliveries, unclear contracts, supplier bank changes, complex tax treatment, non-standard purchases or month-end investigation, the constraint is not data entry alone. Those cases need knowledgeable ownership. Software can keep the evidence together and route the case, but another experienced employee may still be the more urgent need.

2. Compare the full cost of both options

Use the same time horizon for each option, normally one to three years. A hire can start with recruitment cost and become more productive over time. Automation can require concentrated implementation effort before recurring benefits appear. Comparing one month of software with a full year of salary, or ignoring setup because it is not on the subscription invoice, will distort the result.

Be equally careful with savings. If automation releases 60 hours each month, that does not automatically mean 60 hours of cash leaves the cost base. The value may appear as avoided recruitment, less overtime, faster month end, better supplier service or capacity for a growing invoice volume. State which form of value the business expects rather than labelling every saved minute as a direct saving.

3. What AP automation should change

Good AP automation moves invoice information and evidence through a controlled process. It should capture invoices from an agreed channel, extract relevant data, check required fields, identify likely duplicates, connect purchase evidence, prepare coding, route the invoice to the right reviewer, retain the decision history and send an approved bill to the accounting platform.

The important outcome is not that an invoice was scanned. It is that routine invoices need fewer touches and exceptions become clearer. An invoice with a missing purchase order, a price difference or an inactive accounting reference should stop with a reason and an owner. The AP employee can then resolve a defined problem instead of searching inboxes to discover what happened.

1. Standardise receipt. Give suppliers a reliable route and prevent invoices being trapped in personal inboxes.
2. Automate repeatable checks. Validate fields, identify possible duplicates and compare available purchase evidence.
3. Route decisions. Apply approval responsibility consistently and remind the right person without manual chasing.
4. Keep one audit trail. Preserve the source, changes, comments, approval and accounting outcome together.

Automation does not repair an undefined policy. If nobody knows who may approve a purchase or how to treat an invoice without a purchase order, the system will only expose that uncertainty faster. Clarify the rule and exception owner before configuring the workflow.

4. Where an AP employee adds more value

People are strongest where context changes the answer. An experienced AP employee can recognise that a supplier dispute relates to a partial delivery, question an unusual bank detail change, explain a rejected invoice, coordinate a month-end accrual and challenge a coding choice that looks technically valid but commercially wrong.

A person also owns relationships. Suppliers do not want a status badge when a payment is late; they want a clear explanation and a credible resolution. Budget owners may need help understanding why evidence is required. Procurement and finance may need someone to identify recurring non-compliance rather than processing each exception in isolation.

The strongest case for hiring is therefore not “we have more invoices.” It is “we have more work that requires accountable judgement.” That can happen after an acquisition, international expansion, a change in purchasing model or a rise in supplier disputes. It can also happen when the current team has no resilience: even a well-designed automated process still needs someone capable of overseeing exceptions and controls.

5. Compare control, resilience and risk

Another employee can reduce key-person dependency and make review more practical, but headcount alone does not create control. If the same person can create a supplier, change bank details, approve an invoice and release payment, the process remains exposed. Responsibilities and access must be separated according to risk.

Automation can apply checks consistently and make evidence easier to retrieve. It can also scale a bad rule consistently. Poor supplier records, weak approval thresholds or careless access design do not become safe because they sit inside software. The system needs controlled supplier changes, defined roles, reliable accounting references and independent payment authority.

Consider operational resilience as well. A manual process may stop when an employee is absent or an inbox cannot be accessed. An automated process may stop when an integration fails or a workflow has no exception route. Compare how each option detects failure, who is alerted, how work continues and how the backlog is recovered.

6. Build a business case from observable measures

Choose a small set of baseline measures before making the decision. Useful measures include invoices received per month, average processing time, first-pass completion, exception rate, approval time, invoices processed per AP employee, duplicate attempts, late payments and the age of unresolved items. Use several months if volume is seasonal.

Then model realistic scenarios. For a hire, estimate productive capacity after onboarding and retain time for leave, meetings and improvement work. For automation, estimate the share of invoices that can follow the standard route and the review time that remains. Do not assume every invoice becomes touchless, particularly where purchase orders and supplier data are inconsistent.

Run a downside case. Ask what happens if only half the expected invoices use the automated route, implementation takes longer or volume grows faster than planned. A decision that works only under perfect adoption is fragile. A decision that remains acceptable under a conservative case is easier to approve and manage.

7. Choose automation, a hire or a hybrid

Automate first when invoice volume is rising but the work is mainly repetitive, approval chasing is the visible delay, duplicate and audit risks are increasing or the business would otherwise recruit people to rekey data. The objective is to create a stable standard route before adding more capacity to it.

Hire first when the team is already overwhelmed by exceptions, supplier disputes or technical accounting work; when basic duties cannot be separated safely; or when no capable owner has time to lead implementation. The new role should be designed around control and judgement, not simply absorbing an unmanaged inbox.

Use a hybrid when growth is both high-volume and complex. Automate capture, validation, routing and accounting transfer, then hire or develop an AP analyst to own exceptions, reconciliations, supplier communication and process performance. This often produces a better role and delays the point at which another transactional hire is needed.

The sequence matters. If the business hires first, give the new employee responsibility for process improvement rather than allowing the old workflow to expand. If it automates first, protect enough team capacity for testing and supplier communication. Neither choice succeeds when it is treated as an extra task with no owner.

8. Implement the decision without disrupting payment

Begin with a controlled scope: one entity, one invoice channel or a group of regular suppliers. Document the current route, define the future route and agree what must stop an invoice. Test standard invoices and awkward examples, including duplicates, credit notes, tax differences, missing purchase orders, inactive codes and supplier-detail changes.

During rollout, keep daily ownership visible. Someone should watch new receipts, the exception queue, ageing approvals, accounting sync results and invoices still arriving through the old route. Reconcile invoice counts and values between the source, workflow and accounting platform so that a cleaner interface does not conceal missing work.

Review the result after the first month and again after a full reporting cycle. Compare the original measures, ask employees and approvers where friction moved, and refine rules cautiously. The goal is not the lowest possible number of human touches. It is the right human attention applied to the right invoices with evidence that the process remains complete.

Using ArrowBill to create controlled AP capacity

ArrowBill reduces routine invoice handling while keeping the source document and decision together. It captures invoice data, checks for possible duplicates, routes applicable approvals and sends approved bills to the connected accounting platform.

Solo provides core invoice OCR and accounting export starting at £45 per month for 100 invoices, without approval workflows or the procurement module. Team starts at £70, adding controlled access so people across the organisation can contribute to reviews and approvals without unrestricted finance access. Compare the plans on ArrowBill's pricing page.

Team also provides an easy-to-review audit history, approval rules, procurement controls and built-in delegation. An approver can temporarily assign responsibility to an authorised colleague when on holiday, off sick or otherwise unavailable, keeping invoices moving without weakening accountability.

Exceptions remain connected to the invoice for a person to resolve, while payment release stays within the organisation's controlled banking process.

Frequently asked questions