Should You Automate or Outsource AP in 2025? Here's How to Decide
Thinking of modernizing AP? You have two options: Automate with smart software or outsource to experts who handle it for you. Both can cut costs, but which is right for you?
Each manually processed invoice costs between $12 and $25. The right AP solution can cut costs, reduce approval times, and improve efficiency.
Today's AP Reality
Let's talk about what's happening in AP departments in 2025. Teams are juggling more invoices than ever. They’re also trying to get early payment discounts. At the same time, they must guard against increasingly clever payment fraud. Mix in remote work needs and rising costs, and it's clear why modernization has become a priority.
How Modern AP Automation Works
Think of today's AP automation like having a super-smart digital assistant that never takes a day off. These systems can:
Convert paper invoices into accurate digital data (even those tricky non-PO ones)
Match invoices against purchase orders and receipts, flagging issues before they cause headaches
Route approvals to the right people automatically (like sending IT purchases to your tech team)
Handle payments in the most profitable way, maximizing rebates while keeping vendors happy
Show you exactly where your cash flow stands, anytime you need to know
It’s important to know that AP automation doesn’t replace your team. It gives them better tools to work with. Modern systems are built for finance professionals, not tech experts.
Automation in Action
For example, a tech company receives an invoice for 50 new laptops. Instead of emailing back and forth for approvals, AP automation recognizes the purchase order, matches it to the invoice, and automatically routes it to the IT manager for a quick sign-off. The invoice gets paid in days instead of weeks. No one has to chase it down.
How Modern Outsourcing Works
Today's AP outsourcing isn't just about sending work elsewhere. It's about gaining a skilled finance partner. These providers offer:
Complete invoice-to-payment management
Expert handling of complicated cases
Seamless connections with your accounting system
Strong fraud protection measures
Help staying compliant with changing regulations
Outsourcing in Action
A manufacturing company struggled with supplier payments across three countries. Their AP team spent hours researching international payment regulations, and even more time managing multiple bank relationships. The wire fees alone cost them $30,000 annually.
By outsourcing their international AP, they consolidated payments under one provider, slashed wire fees by 60%, and eliminated delays. The result? Stronger vendor relationships and a far more efficient process.
Which Path Makes Sense for Your Business?
When Automation Makes More Sense
Automation is often more effective when your company has:
Unique Approval Needs
Maybe your healthcare purchases need both department and compliance sign-off. Meanwhile, your tech spending requires IT review. Automation lets you build these specific requirements right into your workflow.
Steady Invoice Flow
If your business processes a high and consistent volume of invoices each month, automation can drastically cut approval times. What once took weeks can now take just days.
Strong Supplier Connections
If you've built strong relationships with your vendors, automation helps maintain those connections by making payments more efficient. You maintain the personal touch while ditching the paperwork.
When Outsourcing Makes More Sense
Outsourcing is often more effective when your company has:
Unpredictable Workloads
If your invoice volume fluctuates, maybe due to fast growth or seasonal changes, outsourcing helps you manage these shifts. You won’t need to rush to hire temp staff.
Global Operations
Dealing with multiple currencies and international tax rules? Outsourcing to experts who handle these complexities daily often makes more sense than building that knowledge in-house.
Resource Constraints
When IT is overloaded, adding another system isn’t ideal. Outsourcing takes AP off their plate, so they can focus on bigger priorities.
Mixing It Up: The Hybrid Approach
Here's an interesting option many companies don't consider at first — combining both approaches. A hybrid approach lets you:
Use automation for domestic vendors but outsource international payments
Keep strategic vendor relationships in-house while outsourcing routine transactions
Automate approvals but let experts handle payment execution
Think of it like managing your business travel. You might book routine flights and hotels online (automation), but rely on a travel agent for complex international trips (outsourcing). Together, they make the process smoother and more efficient.
Hybrid in Action
A healthcare provider found the perfect balance by automating their regular vendor payments while outsourcing their medical supply invoices. How?
Regular vendors like office supplies, utilities, and maintenance had straightforward invoices perfect for automation. But medical supply invoices required specialized knowledge to handle complex pricing agreements and group purchasing organization (GPO) contracts.
With this hybrid approach, their team spent less time on paperwork and more time focusing on patient care.
Making Your Decision
When choosing your path forward, consider these important questions:
Volume and Complexity
How many invoices do you handle each month?
What percentage of invoices need special attention?
How many people typically need to approve each invoice?
Your Current Setup
How large is your AP team?
What kind of IT support can you access?
What's your modernization budget?
Tech Requirements
Which systems need to work together?
Do you need mobile access?
What kind of reporting do you require?
Moving Forward
Whether you choose automation, outsourcing, or a mix of both, the key is to find a solution that streamlines processes, cuts costs, and sets you up for future growth.
Corpay’s AP automation solutions help finance teams:
Eliminate inefficiencies
Reduce costs
Take control of payments with confidence
Let’s make AP work smarter, not harder. Reach out to our in-house experts at www.corpay.com today to learn more.