Accounts payable (AP) can be traced back thousands of years ago through the tracking of shipments on clay tablets.
In 2026, the world is in a much more automated and digitised space than ever before, where processes have sped up AP to send and settle invoices in real-time, and in record times.
But before the birth of the internet and global connectivity, many document filing jobs like AP were manual and a lot slower.
Here, Payment Expert takes a deep-dive into AP automation from the ‘Paper Age’ to the ‘Digital Age’, and what the future may look like for invoice sending and receiving as new technologies continue to emerge.
What are accounts payable (and receivable)
Accounts payable is the process of a company sending money to another company or vendor for goods or services paid via credit. This relies on receiving an invoice from the vendor, verifying the invoice and then recording it into its accounts.
Conversely, accounts receivable is the process of a company being owed money by a customer/individual who has purchased goods or services on credit. This involves a company issuing an invoice to the customer and tracking the outstanding payment until the total sum has been paid and settled into the company’s accounts.
While both accounts payable and receivable are almost entirely run on digital platforms using tools to speed up both processes, this was not the case before the internet.
The ‘paper age’ of accounts payable
The AP process before the advent of the internet heavily relied on manually storing invoice paperwork in filing cabinets, using rubber stamps and being physically moved in transit, from hand-to-hand, and vehicle-to-vehicle.
A company had to fill out a multi-part carbon copy of the Purchase Order (PO) when purchasing a good or service, which would then be typically mailed via post to the vendor.
Three PO copies were formed, one for the sender, one for the vendor, and one for the AP Clerk of the sender who manages and files invoices for the company.
During the delivery process, the goods were sent to a loading dock, then the warehouse staff checked the goods to match the PO copy. They would then fill out a receiving report to confirm delivery and send it to the AP clerk’s office.
Once this has been completed, the vendor would print a physical invoice to send via mail to the AP clerk’s office where it was placed in the clerk’s physical ‘in-box’.
The AP Clerk then needs to obtain and match all three documents – the POs, receiving reports, and the invoice – to make sure all information aligns and is correct. Any discrepancies would have required the clerk to consult a contact directory or call the vendor or the warehouse to assess what is incorrect.
A second signature was required for fraud checks, which typically applied to invoices above a threshold of around $500.
If all checks were correct, the clerk would staple all three documents as a voucher package, and place it into the manager’s in-tray for a signed signature. If the manager was out of office or on leave, it would sit in their office until they got back to sign off.
Once the manager had signed the voucher package, it was returned to the AP clerk’s office. A final check run would have been required – which would typically take up to an hour – to go over any final checks.
A bank statement displaying the total sum would then be mailed, usually at the end of the month, to the clerk to register and check to ensure it has been cleared.
Any unchecked entry was considered outstanding and the clerk had to manually calculate the ‘adjusted bank balance’ to ensure the books were balanced.
The ‘digital age’ of accounts payable
Now leveraging the power of the internet, the invoice process today involves emails, scanning technology and payment rails that have significantly accelerated the overall process.
Firstly, the vendor scans the invoice after sending it via email through an electronic data interchange (EDI). All relevant documents are placed and stored into a digital dashboard.
The invoice review process is now performed using optical character recognition (OCR), and increasingly AI. Both automatically identify the vendor, the items of goods and services and can assign codes.
The system identifies the PO in the digital receiving report from the OCR as a digital receipt. If the invoice matches the PO, it can then be marked as ‘ready for payment’.
If there is a mismatch with the invoice, the system can automatically alert the buyer to resolve the discrepancy.
Approvals no longer require physical signatures from managers. The system handles this via routing, which varies based on the total sum of the invoice.
Logic-based routing is applied and auto-approves smaller sums, such as those under $1,000, whereas larger sums, such as $50,000, are sent to the relevant Chief Financial Officer (CFO) or other manager as a notification or email, requiring them to review the audit trail before approving, which can be done wherever they may be.
During the final check run before payment, the system selects the most efficient or appropriate payment method to conduct the final transaction.
This means that companies can use either debit or credit cards (one to three business days), or bank-to-bank transfers such as Pay by Bank, which bypass the card networks to settle in up to three days.
For international invoice payments, the company’s system can automatically convert the sender’s preferred currency into the preferred currency of the vendor.
Once the payment is finally settled, the AP system sends a notification to the company’s enterprise resource planning (ERP) system to keep track of the payment and archive it.
