Market Research Accounts Payable Invoice Automation Solutions

07/03/2024 00:19 Gartner Reprint
Licensed for Distribution
Market Guide for Accounts Payable Invoice Automation

Solutions
7 August 2023 - ID G00756226 - 17 min read
By Micky Keck, Balaji Abbabatulla, and 1 more
The accounts payable invoice automation market continues to evolve as hyperautomation

technologies and new entrants increase efficiency in the process. Procurement technology
leaders addressing invoice automation should understand how their unique requirements will
impact supplier selection.
Overview
Key Findings
Hyperautomation technologies are increasing touchless rates at every step in the accounts
payable process. While new entrants are leading the way by building out AI-first solutions, they
may not solve every need from capture to payment.
Buyers have a hard time finding the correct solution for them due to the large number of
options that all look alike. Mismatches in supplier selection and ability to execute result in a
lack of support for key use cases that buyers need to address.
Global companies often cannot find a single solution that meets all of their requirements due to
the number and type of ERP/financial systems in use, countries they operate in, as well as
process and policy requirements.
Recommendations
Procurement technology leaders should:
Match best-fit vendors to requirements by documenting use cases, systems, geographic scope
and invoice volumes.
Pressure-test a vendor’s ability to provide end-to-end automation by providing a sample of

invoices to run a proof of concept before signing a contract.
Increase program success in complex, multinational organizations by developing a composable

strategy that allows for specialist solutions that solve specific regional problems.
https://www.gartner.com/doc/reprints?id=1-2DNDPWDY&ct=230515&st=sb 1/15
Market Definition
Accounts payable invoice automation (APIA) tools automate the capture, validation and
processing of invoices. These solutions attempt to automatically match invoices to purchase
orders (POs) and contracts, or automatically code those invoices that would not have a PO.
Payment management, ranging from OK to pay to complete invoice payment, is also included. The
expanded scope of APIA includes advanced capabilities, such as automated multiway matching,
fraud detection and cash management.
Market Description
APIA solutions are used to streamline the process of capturing, processing and paying for
inbound invoices within organization policy. Various country-specific standards and laws may
need validating as part of the approval process to ensure that only legally valid invoices are paid.
Automating as much of this process as possible is the primary purpose of such solutions.
APIA solutions are found as stand-alone solutions, are included in procure-to-pay suites, or are
extensions of financial solutions. Customers may also look to build their own custom solution
through the use of robotic process automation (RPA) tools. Figure 1 shows the complete scope of
APIA, although many solutions only address a subset of the complete feature set.
Figure 1: APIA Technology
Market Direction
The APIA market is very dynamic with a constant inflow of entrants, both from new vendors and
from vendors in adjacent market spaces. Customers are demanding fully automated, touchless
processing of invoices while also needing to address external issues such as supplier capabilities
and government regulations. Government regulations continue to push the market toward
digitization, often with business to government (B2G) requirements, then evolving to cover all B2B
transactions. 1 Governments around the world are increasingly moving to a “clearance” model
where the government must approve all invoices before they are considered legal to pay.
New investments in software to ensure continuity in invoice processing and supplier payments
resulted in faster growth for APIA software. The introduction of new government regulations by
several countries led to higher investments in supplier e-invoicing software. These trends will
become more significant as enterprises accelerate their digital business transformation and more
governments introduce compliance mandates over the next five years. Gartner forecasts that the
spend on the APIA and supplier e-invoicing software markets will be nearly $1.75 billion through
2026, up from approximately $925 million in 2021, at a compound annual growth rate (CAGR) of
14% (see Figure 2).
Figure 2: Forecast: APIA and Supplier E-Invoicing, Worldwide, 2021-

2026
Market Analysis
The APIA market includes point solution vendors as well as vendors from functionally adjacent
spaces that include APIA functionality as part of a cross-process solution. To make the situation
more complex, customers define APIA functionality in different ways depending on their size,
process maturity and industry-specific needs. Finally, APIA solutions are ultimately the
combination of a number of subfeatures, including optical character recognition (OCR), e-invoicing
and payments. The most common deployment model is SaaS; however, some vendors will offer
alternative deployment models.
Understanding the entire scope of APIA is critical to understanding the market. This is because
the market has evolved by combining the submarkets of e-invoicing (capture), accounts payable
(AP) automation (match/code and workflow) and payments.
Advanced Capabilities
APIA solutions are continuously evolving and becoming more sophisticated. AI is increasingly
used to automate and enhance almost every task in the process, and is now table stakes for
document capture. Most APIA solutions also incorporate e-invoicing capture functionality as
organizations increasingly demand a single solution that can meet their capture-to-OK-to-pay
process needs. Adding to that is the constant change generated by new government invoice
compliance requirements. These regulations may take the form of data requirements, electronic
formats, clearance by the government, local data storage, or all of the above. Support for payment
and payment term management capabilities are becoming more common to solve the entire
capture-to-pay process.
The following is a list of advanced AI/machine learning (ML) capabilities that are becoming
common in solutions:
Intelligent computer vision and natural language processing (NLP) capture — OCR as a base
digitization solution has limited effectiveness and requires a lot of effort to maximize its value.
Cutting-edge vendors are now utilizing AI-driven computer vision and NLP to digitize image-
based documents at much higher success rates out of the box. These solutions also require
much less training to get to steady state effectiveness. Touchless capture rates from these
solutions can reach the high 90s percentiles. Estimated market penetration — 10%.
AI-enhanced OCR capture — These solutions use AI to correct common image issues that
cause OCR capture errors that would normally force human corrections. Additionally, NLP and
learning document structure to extract and identify data eliminate geography-based OCR
extraction errors. Some may use multiple OCR engines to digitize a document, then use AI to
determine which engine has the best capture of the document. The combination of these steps
can elevate OCR capture success rates into the high 80% to low 90% range. Estimated market
penetration — 75%.
Machine-readable Invoices — ML parsing of machine-readable documents (where the

document is not an image) can increase accuracy rates to the high 90% range. Estimated
market penetration — 40%.

Automated account coding — Deployment of trained ML algorithms can assist AP staff and
buyers with accurate, consistent account coding suggestions. Estimated market penetration —
35%.
Fuzzy purchase order (PO) matching — AI-based intelligence to solve the problem that many
invoices cannot be exactly matched due to factors that force the invoice to deviate from the PO;
for example, services that are partially taxable. The invoice would be created with multiple lines
to correctly account for taxes, but the PO is unlikely to take this fact into account. Estimated
Duplicate/fraudulent invoice detection — AI engines specifically look for potential duplicate

invoices based on content rather than just invoice number. Unusual invoice amounts can also
be identified and flagged for review before submitting for payment. Estimated market
Smart workflows — AI learns in the background how invoices with errors should be distributed
so that the fewest people need to review the document. An example: invoices with price
mismatches can often only be resolved by the person who raised the PO, thus the smart
workflow engine would learn this and not put this type of error in an AP clerk’s work queue.
Estimated market penetration — 15%.
Supplier identification — Suppliers are often duplicated in an organization’s master data for a
number of reasons. Just looking at the name of the supplier on the invoice may not be
sufficient to identify the exact vendor who issued the invoice. This can cause matching
problems with purchase orders. AI engines learn from a number of data points on an invoice,
and even via the email or other route the invoice was submitted, to identify the exact supplier.
Some can also learn supplier relationships so that a related supplier can be matched to a PO.
This situation is often seen in parent-child-related supplier records where a PO is issued to the
child supplier, but the parent supplier issues the invoice. Estimated market penetration — 15%.
Supplier participation rates for dynamic discounting programs — ML-supported dynamic

discounting programs generate suggestions for identifying the best suppliers to offer and
forecast their expected uptake rate. Estimated market penetration — 10%.
Vendors are also extending functionality in the following areas:
Supplier portal with advanced collaboration features — Portal functionality is increasing

beyond just invoice submission and status checking. Additional functions can include: supplier
onboarding, dispute management, payment management and accounts receivable
management. Estimated market penetration — 35%.
Price auditing — Intelligent auditing of pricing that can be variable; for example: transportation
lanes or advertising spot buys. The price on the PO often can be correct at the time of issue, but
incorrect at the time of invoicing, resulting in a mismatch. The price auditing capability would
use contracts and other datasets to determine the correct price and resolve the issue.
Estimated market penetration — 5%.
Payments — Vendors are increasingly offering full payment capabilities, including automated
clearinghouse (ACH), virtual card, wire, cross-border and private network token-based options.
Some vendors go as far as including full treasury management solutions. Estimated market
Advanced analytics — Information-hungry customers are driving vendors to provide visibility to

new reports, such as invoice failure analysis, payment term compliance, early payment discount
impact and other process-related reports. Estimated market penetration — 35%.
Digital mailrooms — Vendors are adding more value-added services around the processing of
nondigital invoices. These can include AP email inbox monitoring up to full scanning of paper
invoices sent to a post office box. Estimated market penetration — 20%.
Dispute Management — Most solutions offer messaging against a document, but full dispute
management requires formal tracking of all communications, status of the dispute, and the
ability to resolve the dispute via the auto-creation of offsetting documents, such as a credit
memo. Estimated market penetration — 15%.
Advanced integrations — Integrations to tax, compliance, government and invoice networks are
in high demand. Many governments also require the use of local partners to access their
compliance networks, so vendors are constantly building out their partner base. Estimated
Customers looking for APIA solutions typically have different needs depending on their size and
complexity. The typical use cases by organization size are listed as follows:
Customer Segmentation
SMB Market (Less Than 100 Employees)
Customers in the small and midsize business (SMB) market typically have the most simplistic set
of requirements:
Capture is heavily paper- or PDF-based, and header-level invoice data is sufficient.
Account coding is based on header-level data only.
Purchase order usage is low, and when POs are used, two-way match is common.
There is a limited need for country legal compliance for those organizations headquartered in
low-regulation countries like the United States.
Non-real-time integrations with accounting systems are acceptable.
Payment automation is often the main reason for buying an APIA solution.
SaaS is the most common deployment model.
Single sign-on (SSO) support is not required.
Midsize Enterprise (100 to 999 Employees)

Customers in the midsize enterprise market require more functionality and often use APIA as the
evolution path to a more sophisticated AP organization:
Capture is often the most pressing need for fast-growing organizations as invoice volume
outgrows AP staffing.
Account coding at the invoice line level is desired.
PO usage is increasing, and there is a desire to support three-way match.
Support for integrating with multiple back-end systems is typical, especially for companies
growing through acquisition.
SaaS is the most common deployment model.
Payment is an evolving need for this customer base.
Basic supplier collaboration and invoice inquiry support are desired.
Large Enterprise (More Than 1,000 Employees)

Customers in the large-enterprise market require the most complex set of requirements, often
with existing technology that must be considered when designing a future-state solution. A
requirement set may preclude the use of a single solution to fully meet their needs:
Legal compliance support is required for multiple countries.
Complex account coding and PO-matching rules are needed.
Four-way and/or n-way matching may be required.
Multiple language and currency support is required.
May require functionality to support a shared services center or center-of-excellence model.
Add-on services, such as digital mailrooms, are often considered.
Multiple formats of electronic invoices must be supported, as well as network standards, such
as Peppol.
Cash management functions, such as dynamic discounting, are much more important.
Real-time integration via APIs is more common.
Customers often look at advanced capabilities, such as artificial intelligence, real-time auditing,
APIs and cross-border payments, as key differentiators.
Location of data centers for SaaS solutions (data residency) is often a concern.
SaaS is still important, but some customers will require on-premises, or ERP-embedded
deployment options.
Market Competition
Customers are often confused when looking at the APIA market, as many vendors offer a partial
solution in this space. Often these vendors are not APIA-focused point solutions, but come from
adjacent market spaces and offer APIA functionality as an extension of their core focus. Table 1
shows the market spaces that have expanded into APIA and why. Vendors that start in a specific
domain typically have stronger capabilities in that starting domain. Customers may also not
realize they have an existing relationship with a vendor that provides APIA capabilities as part of a
larger solution; they should review their existing procurement and financial solutions for potential
APIA support.
Table 1: Adjacent Markets From Which Vendors Expand Into APIA
Starting Market Reason for Expanding to APIA
Procurement Procurement solutions generate POs and often already have

connections to suppliers via portal functionality. Invoices are an
extension of the overall supplier relationship.
ERP/Accounting The transaction is accounted for in the system already; users do all
their work in one system.
Payment Invoices are one of the primary triggers for payment to an external
party.
OCR/Intelligent Document One key use case is digitizing the invoice; OCR has been the main
Processing (IdP) technology for that activity.
RPA The vendors provide generic automation tools that meet the basic
needs for capture and processing of invoices.
Content Management Invoices are just another type of document that needs to be
managed. Managing all documents in one solution simplifies
overall document management.
Banking They provide value-added service to their customers; they often

white-label existing APIA solutions.
E-Invoice/Electronic Data This includes product expansion from electronic document capture
Interchange (EDI) to more holistic solution.
Supplier Collaboration Invoices are another type of supplier collaboration.
AI Invoice issues are solved through an AI automation lens where

advanced technology eliminates touchpoints.
Source: Gartner (August 2023)
Legal Compliance
Governments around the world are adding regulations on what is defined as a legal invoice. This
can range from simple invoice data requirements to exact standards on data, storage,
transmission and presentation to the government for approval. These regulations are continuously
evolving and may differ for B2B versus B2G invoices. A main driver of these regulations is to
reduce tax avoidance. Given this driver, it should be expected that more governments will increase
regulation over time.
This Market Guide does not cover specific invoice compliance regulations, but there are two
common types that everyone should be aware of:
Postaudit — Invoice auditing after the fact — common in the European Union.
Clearance — Invoices must be presented to the government in real time — common in Latin
America.
Organizations should expect that more countries will move to a clearance model, as this model is
most effective for ensuring tax compliance. This model typically places more burden on the
supplier for generating compliant electronic invoices; however, it can make the process of
capturing e-invoices easier for the buyer.
Representative Vendors
The vendors listed in this Market Guide do not imply an exhaustive list. This section is intended to
provide more understanding of the market and its offerings.
Vendor Selection
Gartner estimates there are more than 150 vendors in this market. The 40 vendors listed were
selected based on best fit to the market definition and are actively selling a stand-alone APIA
solution to new customers. Market coverage for each vendor was determined from discussions
with the vendor or vendor website analysis. The vendors listed are intended to provide buyers with
a wide selection of options that cover the three market segments listed and provide a mix of
capabilities identified in this document. Tables 2 and 3 show representative vendors in APIA by
geography.
Table 2: Representative Vendors in APIA, North America Headquartered
Vendor Name Product Name
Airbase Airbase Spend Management
Applexus Technologies Applexus InSITE
AppZen Autonomous AP
AvidXchange AvidInvoice and AvidPay
BILL bill.com AP Automation Software
Coupa Coupa Cloud Invoicing Management
Corcentric Cor360 Accounts Payable (AP) Automation solution
DataServ DataServ
Direct Commerce AP Automation
Emburse Chrome River
Hyland OnBase
MHC MHC NorthStar and MHC Classic
MineralTree MineralTree Invoice-to-Pay
OpenEnvoy OpenEnvoy AP automation
OpenText OpenText Vendor Invoice Management for SAP Solutions
Quadient Quadient AP Automation by Beanworks
Stampli Stampli Accounts Payable Automation (AP Automation)
Tipalti Invoice Management
Tradeshift Tradeshift Pay
Vic.ai AP Autonomy
Vroozi Vroozi Invoice
Some vendors may be headquartered in multiple regions; for the purposes of this table, vendors are
classified based on their primary headquarters location.
Table 3: Representative Vendors in APIA, Europe and Asia Headquartered
Vendor Name Product Name
Basware Basware AP Automation
Cevinio Cevinio
Comarch Comarch e-Invoicing
Docflow Y.IM
Esker Accounts Payable automation software
Hypatos Hypatos Accounts Payable
ITESOFT ITESOFT AP automation
Medius Medius Accounts Payable Automation
Newgen Newgen Invoice Processing
Pagero AP Automation
Portalink Portalink Accounts Payable
SEMINE SEMINE
Serrala Serrala AP Automation
Snowfox.AI Snowfox.AI Invoice Automation
SoftCo SoftCoAP
SpendConsole Accounts Payable Automation
xSuite xSuite Invoice
XTGlobal Circulus
Yokoy Yokoy Invoice
Some vendors may be headquartered in multiple regions; for the purposes of this table, vendors are
classified based on their primary headquarters location.
Market Recommendations
AP invoice automation is something that all organizations can benefit from and, in many
countries, government regulations make this process easier than ever. Invoice automation allows
organizations to:
Have more flexibility with their cash
Reduce late payments
Improve supplier relationships
Reduce the cost to process an invoice
Reduce incorrectly paid invoices
Reduce supplier invoice status inquiries
Increase the amount of invoices that can be processed per AP full-time equivalent (FTE)
Comply with company policies and controls
Procurement technology leaders should review their current invoice-processing capabilities to

understand the potential value of APIA:
Calculate the current invoice capture-to-OK-to-pay cycle time and the current touchless
processing rate. If capture-to-OK-to-pay is more than seven days, and/or touchless rates are
less than 50%, there is a good opportunity for automation.

Catalog your current invoice volumes, geographic spread, PO- versus non-PO-backed invoice
rates and any specific challenges with the current process.
Map out the requirements of your existing technical landscape; organizations with multiple
accounting, ERP or procurement systems typically need a more sophisticated APIA solution.
Work with finance, treasury and procurement to ensure everyone is aligned on future-state
goals.
Create a shortlist of vendors based on requirements and the organization’s broader

applications strategy. Point solutions should be considered when an ecosystem strategy is
supported. Otherwise, consider a suite to address broader procure-to-pay processes.
Given the complexity of supporting so many government-specific invoice regulations, buyers of

APIA software should confirm the vendor they select supports their required countries.
Procurement technology leaders can deliver more savings to their organization through APIA by:
Updating invoice control and approval policies to better account for the consistency, validations
and checks an APIA solution can add to the process.
Setting up process metrics to address where invoices are still requiring manual intervention to
process and creating corrective action plans.
Providing suppliers with options for submitting electronic invoices that meet their capabilities.
Reviewing how well the PO creation process (or lack of POs) is impacting invoice automation.
Low-quality purchase orders can heavily impact downstream invoice automation rates.
Evidence
1
Supply Chain Brief: July 2024 E-Invoicing Mandate in France: What Chief Procurement Officers
Must Know
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07/03/2024 00:19 Gartner Reprint

Licensed for Distribution

Market Guide for Accounts Payable Invoice Automation

By Micky Keck, Balaji Abbabatulla, and 1 more

The accounts payable invoice automation market continues to evolve as hyperautomation

Pressure-test a vendor’s ability to provide end-to-end automation by providing a sample of

Increase program success in complex, multinational organizations by developing a composable

Figure 1: APIA Technology

Figure 2: Forecast: APIA and Supplier E-Invoicing, Worldwide, 2021-

Machine-readable Invoices — ML parsing of machine-readable documents (where the

market penetration — 40%.

Duplicate/fraudulent invoice detection — AI engines specifically look for potential duplicate

Supplier participation rates for dynamic discounting programs — ML-supported dynamic

Vendors are also extending functionality in the following areas:

Supplier portal with advanced collaboration features — Portal functionality is increasing

Advanced analytics — Information-hungry customers are driving vendors to provide visibility to

Capture is heavily paper- or PDF-based, and header-level invoice data is sufficient.

Account coding is based on header-level data only.

Non-real-time integrations with accounting systems are acceptable.

SaaS is the most common deployment model.

Single sign-on (SSO) support is not required.

Midsize Enterprise (100 to 999 Employees)

Account coding at the invoice line level is desired.

PO usage is increasing, and there is a desire to support three-way match.

SaaS is the most common deployment model.

Payment is an evolving need for this customer base.

Basic supplier collaboration and invoice inquiry support are desired.

Large Enterprise (More Than 1,000 Employees)

Legal compliance support is required for multiple countries.

Complex account coding and PO-matching rules are needed.

Four-way and/or n-way matching may be required.

Multiple language and currency support is required.

May require functionality to support a shared services center or center-of-excellence model.

Add-on services, such as digital mailrooms, are often considered.

Real-time integration via APIs is more common.

Table 1: Adjacent Markets From Which Vendors Expand Into APIA

Starting Market Reason for Expanding to APIA

Procurement Procurement solutions generate POs and often already have

Banking They provide value-added service to their customers; they often

Supplier Collaboration Invoices are another type of supplier collaboration.

AI Invoice issues are solved through an AI automation lens where

Source: Gartner (August 2023)

Table 2: Representative Vendors in APIA, North America Headquartered

Vendor Name Product Name

Airbase Airbase Spend Management

Applexus Technologies Applexus InSITE

AvidXchange AvidInvoice and AvidPay

BILL bill.com AP Automation Software

Coupa Coupa Cloud Invoicing Management

Corcentric Cor360 Accounts Payable (AP) Automation solution

Direct Commerce AP Automation

Emburse Chrome River

MHC MHC NorthStar and MHC Classic

MineralTree MineralTree Invoice-to-Pay

OpenEnvoy OpenEnvoy AP automation

OpenText OpenText Vendor Invoice Management for SAP Solutions

Quadient Quadient AP Automation by Beanworks

Stampli Stampli Accounts Payable Automation (AP Automation)

Tipalti Invoice Management

Tradeshift Tradeshift Pay

Vroozi Vroozi Invoice

Source: Gartner (August 2023)

Table 3: Representative Vendors in APIA, Europe and Asia Headquartered