Top Accounts Payable Software Options for Small Businesses

Software can help small businesses bridge the tech gap and thrive. Check out the pros and cons of the top accounts payable software for small businesses
Written by:  Bridey Joyce
Last Updated:  February 1, 2024
happy bookkeeper working at books

Businesses with fewer than 500 employees may be classified as “small,” but when it comes to software solutions, they may still have needs and expectations similar to their larger counterparts. 

One area where headcount doesn’t predict workflow is accounts payable (AP) accounting software. Even small businesses can process hundreds or even thousands of invoices per month. Manually processing this level of invoicing can create logjams and burnout. 

Accounts payable software takes the weight of processing and managing AP transactions off employees’ shoulders. Using AP software makes teams more efficient, better informed, and more prepared to create value within their organization. 

This article covers the essentials of selecting an accounts payable software solution for a small business or mid-market organization. You’ll learn what AP platforms are, how they operate, and what to look for when selecting an automated accounting solution for your organization. We’ll also share the top five accounts payable software tools for small businesses.

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What is accounts payable software?

Accounts payable software is financial technology that automates the management of a business's accounts payable processes. It simplifies tasks and minimizes manual steps related to vendor payments, including:

  • Purchase order processing
  • Approval workflows
  • Invoice processing
  • Payment execution
  • Fraud monitoring
  • Risk management
  • AP reporting and analysis

Organizations use accounts payable software to reduce manual work, improve accuracy, ensure timely payments, avoid late fees, and strengthen vendor relationships. It can also provide insightful reports on payable amounts, due dates, vendor details, etc. 

AP software enables strategic decision-making and cash flow management. Thus, accounts payable software helps small businesses and mid-market organizations operate their finance departments efficiently.

How does AP software work?

Accounts payable software functions through a series of workflows that streamline the process of managing payables. 

  1. When an invoice arrives from a vendor, it enters the AP software system. Invoice capture happens electronically through a direct integration, API, email, or digitization of a paper invoice via optical character recognition (OCR). AP software can automatically read and extract relevant data from these invoices, eliminating the need for manual entry. Automation of the capture process speeds up processing and reduces human error.
  1. After extracting the necessary details, the software matches the invoice with corresponding purchase orders and receiving data (such as bills of lading) in the system. This process is called three-way matching. The matching process validates that goods or services billed were received at agreed prices, ensuring no overpayments or fraudulent transactions occur.
  1. Once validated, the invoice enters into an automated approval workflow. It gets routed to appropriate individuals or departments based on predefined rules set within the platform. These rules can be set based on parameters like invoice amount, vendor name, or department responsible.
  1. Upon approval, payment execution takes place. AP software can be programmed to schedule payments before or on their due dates, helping businesses take advantage of early payment discounts and preventing late fees.

In addition to these main functionalities, AP software monitors for any signs of fraud, checking for anomalies such as duplicate invoices. It manages all vendor-related information in one place, making tracking easy.

Robust AP solutions also have features to generate comprehensive reports, providing organizations with insights into payable amounts, vendor details, spending patterns, and category trends. This reporting aids strategic decision-making and effective cash flow management.

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What should small businesses look for in AP software?

Having a small business doesn’t mean having small software needs. Even entry-level AP software solutions should offer a competitive, helpful mix of key features and functionality to help AP professionals be more effective. 

Look for a software solution that offers the following features:

Intuitive interface: Small business users may not have sophisticated IT resources or internal procurement and finance trainers for onboarding to a new AP software platform. This means the chosen software must be quick to learn and implement. An intuitive UI and well-organized features make it easier for staff to get comfortable with the software, making it more likely they’ll use the new platform effectively.  

Integrations: The software should seamlessly integrate with existing systems like an ERP (enterprise resource planning) system or accounting software, facilitating smoother operations. Integrations eliminate the need to create redundant data in separate systems. They also minimize the errors and issues that manual duplicate entry sometimes creates. 

Scalability: As small businesses grow, their AP needs typically change. Even if the business doesn’t currently use integrations or have a complex tech stack, AP platforms should have plenty of runway for future expansion and evolving use cases. Choose a scalable solution with the necessary features and an option to upgrade later. 

Competitive pricing: Budget constraints are a reality for many small businesses. An ideal AP solution should offer competitive pricing without compromising features and functionality. Tiered plans are a great way to step into a platform with an appropriate level of functionality and expand as business needs evolve. 

Security: Given the sensitive nature of financial data, robust security protocols are non-negotiable in AP software. Choose a solution with security features such as role-based permissions and data encryption to prevent unauthorized access and information breaches.

Efficient vendor management: The ability to manage and track all vendor-related information within one system simplifies processes and improves efficiencies. Select a software tool with an easy-to-use, well-organized vendor management process. 

Reporting features: Comprehensive reporting tools provide insights into payable amounts, spending patterns, vendor details, and category trends. Look for a solution with reporting capabilities that aid in strategic decision-making and communicating AP data effectively across the organization.

Customer support: Reliable customer service is vital, especially for small businesses lacking in-house technical expertise. A good AP software provider offers support via multiple channels and timely resolution of issues. Choose a solution that provides customer service channels like email, phone, Slack, and other popular communication methods. 

Automation: Automating repetitive tasks like invoice management and payment processing can save time and minimize errors without resorting to AP outsourcing. The best AP solutions offer automation features that streamline these processes. With automation, AP and finance teams can streamline activities like purchase order creation, approvals, payments, reporting, and spend analysis.

Fraud detection: Algorithmic detection and AI monitoring make safeguarding against potential financial losses easier. Choose a solution with features that prevent user-generated changes to procurement and AP data and those that use enhanced data monitoring to reduce fraud risk.

The 5 best accounts payable software for small businesses

One of the best ways to ensure your AP team’s processing and practices provide maximum benefit is by selecting a software solution that has the features and flexibility a small business needs. With many options on the market, it can be difficult to sift through them to find the best software for your business. 

These five accounts payable software platforms offer a balance of features, scalability, and competitive pricing, making them excellent options for small business users.

1. Order.co

Order.co goes beyond AP and spend management to provide a total solution for procurement, AP processing, and spend efficiency. Using Order.co, small and mid-market businesses can access features that make larger organizations more efficient and cost-effective, including guided procurement, dynamic spend management, AI tools, robust reporting tools, and multiple payment methods (including credit card and ACH). Order.co makes it easy to scale your process to new locations as you grow. It also has financing options that create more cash flow flexibility for businesses ready to scale. 

Features

  • Automatic general ledger (GL) coding
  • Extensive accounts payable automation
  • Three-way matching
  • Curated procurement catalogs
  • Order.co Financial Offerings
  • Virtual and physical procurement cards

Pros

  • The system allows users to purchase from any vendor, offering direct integrations, API connectors, and even human support for offline vendors. 
  • Order.co’s Financial Offerings preferred advance program gives businesses access to up to $500,000 in spending power with universal terms and reasonable approval processes.
  • Budgetary controls and role-based permissions make it easy to manage spending by department, individual, location, organizational level, or other key parameters. 

Cons

  • Order.co does not currently support raw materials purchasing or the RFP/bid-based processes. 
  • Users cannot purchase software directly through Order.co. However, the virtual card feature allows users to pay for subscriptions through the system and capture the cost automatically. 

2. Airbase

Airbase provides a modular approach to procurement and spend management designed to meet the needs of small and medium businesses. It offers powerful, enterprise-style modules for AP automation, expense management, and corporate card issuance. Airbase uses a combination of robust integration options, no-code workflows, and payment in 145 currencies to help growing businesses perform globally. 

Features

  • Guided procurement
  • Multi-subsidiary support
  • Expense management
  • Mobile app access

Pros

  • The platform is built with a user-friendly interface that makes it easy to learn the system.
  • Guided procurement offers an automated intake process with a no-code solution for bringing internal and external stakeholders together.

Cons

  • The app has minor glitches, specifically with workflows and expense imaging. 
  • Airbase doesn’t offer a chat-based support feature for quick real-time answers. 
  • Some basic functions, such as backing out payments or rejecting incorrectly assigned invoices, require support assistance to remedy. 

3. Tipalti

This finance automation solution offers small business users ways to streamline their procurement process, automate AP processes, and get control of expense reporting and employee-led spending—all in one place. It has features to assist with supplier onboarding, tax compliance, international payments, and inter-system data sharing, such as ERPs and other business intelligence tools. 

Features

  • Third-party integrations and API 
  • Mass payment features
  • Expense management

Pros

  • The system offers integrations for many well-known and lesser-known software programs. 
  • It offers mass payment for multiple vendors to save time and reduce fees from missed payments.
  • The system is easy to understand, even for non-finance and casual users. 

Cons

  • The platform has some difficulty generating immediate check images for users conducting research.
  • Some users have trouble paying vendors in certain countries, though the system offers payment in over 140 currencies. 
  • Reports for bank reconciliation are sometimes challenging to work with, requiring research and journal entries to tie transactions back to bank records.

4. Precoro

The Precoro procure-to-pay solution offers small businesses access to inventory management, speedy reconciliation, better invoice approval practices, and enhanced budgetary control. It emphasizes process and workflow automation as a means to help customers improve and expand their AP and procurement management practices.

Features

  • Versatile request management
  • Industry-specific support
  • Customizable settings 

Pros

  • The system offers strong budget features with flexibility for tailored business processes. 
  • Precoro is an easy-to-implement solution with a simple, effective UI. 
  • It features robust custom reporting capabilities for visualizing data and driving decision-making.

Cons

  • Some UI experiences, such as making receipts for company POs, route a workflow back to the main page rather than the processing screen, making them more difficult. 
  • Some users respond that invoice processing is slow due to how the system handles error checking. 
  • Users would like better linking between budgets and associated purchase orders.  

5. Ramp

Ramp offers a complete AP solution for bringing together expense tracking, corporate card features, bill payment, and vendor management. It helps small businesses automate their finance operations processes and unifies data entry and management through integrations. 

Features

  • Procurement cards
  • App-based expense management
  • Procurement management
  • Accounting automation

Pros

  • The system helps finance teams set and enforce dynamic spending limits through its procurement and corporate card features for better budgetary control.
  • Receipt capture and reminder tools make it more likely that expenses will be recorded.
  • Emergency spend requests allow users to get exceptions through the mobile app for approval of out-of-policy, one-time expenses, and purchases.

Cons

  • Bank cash flow fluctuations may cause instances where funds are unavailable and cardholders cannot charge purchases. 
  • Lack of access to a live, phone-based technical support person makes it harder for users to get support when needed.
  • Ramp does not currently support Apple Pay.
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Make accounting faster and more accurate with Order.co

For small businesses, stepping up into robust accounts payable software is fundamental to ensuring budgetary control for sustainable growth. AP automation software provides the tools teams need to capture data effectively, get approval on purchase requisitions, verify the accuracy of orders and invoices, and pay vendors promptly to save money and build relationships. 

Order.co goes beyond AP processing to help small businesses and mid-level enterprises manage sourcing, purchasing, payment, and spend management all in one platform. It provides flexible features ideal for such users while maintaining competitive pricing, scalability, and overall value. 

To see how Order.co can help small and medium-sized businesses solve big AP challenges, download this free ebook.

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