Accounts payable automation for small businesses: from emailed bill to paid
6 min readUpdated By the thruflow team
The short answer
To automate accounts payable, have vendors' bills go to one email address, let software read the vendor, bill number, date, lines and total, flag duplicates and price changes, match each bill to its purchase order where there is one, have someone other than the person who entered it approve it, post it to your accounting system on the right accounts, and record each payment, in full or in part. The typing goes away; the checks stay, and get more consistent.
The steps
- One address for bills. Vendors keep emailing as they do; forward their bills, or set a rule, to a bills address.
- Read. The vendor, their bill number, dates, terms, each line and the total are read from the PDF or email, with uncertain values flagged.
- Check. The same bill sent twice is caught, and prices are compared with that vendor's last bill.
- Match. A bill against a purchase order is compared with it: two-way (the order and the bill) or three-way (the order, what was received and the bill).
- Approve. Someone other than the person who entered it approves it.
- Post. It goes to your accounting system with each line on the right account or item.
- Pay. Pay it in full or in part, and record the payment so the balance and aging stay right.
The controls that matter
- Separation of duties: whoever enters a bill doesn't approve it, and whoever approves it doesn't pay it.
- Duplicates: the same file, or the same vendor and bill number, flagged before it's recorded twice.
- Bank details: a change to a vendor's bank details confirmed out of band and with a second factor, because that's how payment fraud usually starts.
- An audit trail of who entered, approved, posted and paid each bill.
Catching price increases
Compare each line with what the same vendor charged for the same item last time. A blank tee billed at $3.40 when the last bill said $3.00 is 13.3% more; on 200 pieces it's $80.00. Either a new price was agreed, and you update your costs, or it wasn't, and you ask for a credit.
What to look for in a tool
- It reads the formats your vendors actually send, including scans and bills in the email body.
- It shows where each value was read, so checking is quick.
- It enforces approvals and separation of duties, with a relaxed mode for very small teams.
- It matches bills to purchase orders, and flags price changes and duplicates.
- It posts to your accounting system on the accounts you choose, without creating duplicate vendors.
- It records part payments and keeps vendor balances and aging right.
How thruflow does it
thruflow gives each organization its own bills address. Bills are read with every value pinned to the page, duplicates are flagged, a second person approves (and someone else pays), bills are checked against purchase orders, and each posts to QuickBooks Online on the accounts you choose. Recover flags a vendor charging more than last time or billing past a purchase order. thruflow records payments; it doesn't move money.
Request accessQuestions
- What is three-way matching?
- Checking a vendor bill against both the purchase order and what was actually received before paying it. Two-way matching compares only the order and the bill.
- Does AP automation pay vendors?
- Some tools move money; others, like thruflow, record bills and payments and leave paying to your bank or a payments service.
- We're a team of two. Is separation of duties realistic?
- Partly. Where one person must do both, record that the rule was waived, so the history stays honest, and keep vendor bank-detail changes behind a second check.