The Ultimate Guide to Accounts Payable Automation for Property Management

Accounts payable is one of the jobs that kill time and never get done. As an accountant who has worked in the property management industry for the last 19 years, I know the time it takes to wrestle with massive paperwork. In fact, every time the billable items increased and the workload overwhelmed us, our organization was forced to expand the accounting team. But that didn't put an end to the challenges we were facing. We used to spend a good chunk of the day fumbling through records, storing receipts, and chasing bills. 

Every accountant used to process around 30-40 invoices a day. According to the Institute of Finance Management, the cost of processing one invoice manually is around $10-23. And even with such a high processing cost, an average of 2-3 manually processed invoices turn out incorrect. The common mistakes are underpayments, overpayments, and incorrect bank account numbers. Most of these mistakes are irreversible and the outcome is disastrous. 

Now we're in an era of work from home. The communication gap has increased, and with it, the chances of unresponsive follow-ups, mistaken approvals, duplicate payments and errors. Cost of labour has also hiked, which means expanding the accounting team to chase the increasing billable items isn't a solution. 

Thankfully, technology has improved, and we're now transitioning from a mix of paper and digital files to full accounts payable automation. As an accountant who has gone through the pain of paperwork and seen the profits being eroded by simple mistakes, and then transitioned to the latest automated accounts payable systems, I'll guide you through the benefits of this these systems, how you can implement and run one, and of course give you my recommended system for property management.    

The Ultimate Guide to Accounts Payable Automation for Property Management

Before we get into accounts payable automation, let's start with the basics: property management and payment processing. Real estate property is an investment, and landlords expect the tenants to make timely payments. But because of the complexity of tracking the payments, mitigating fraud, managing the cash flow, and managing bills like maintenance fees, electricity and gas bills, insurance premiums, and taxes, landlords pass this work to property managers. 

So, property management companies usually deal with many landlords in both residential and commercial sectors, which makes the financial management even more complex. Now, property management payment processing is the procedure which these property managers use to collect and verify rent payment from tenants, and manage property-related bills like maintenance fees. 

When we talk about accounts payable automation for property management, we're basically talking about computer software that can handle these financial transactions with higher speed and accuracy compared to human accountants. 

Why AP Automation Matters in Property Management

As we said, property management involves large volumes of invoicing, calculations, and financial handling. Here are some reasons why AP automation matters in property management.

Higher Accuracy

One of the things that I have seen erode property management companies' profits or even sink them into losses is simple human mistakes during data entry, calculations and invoice matching. I have severally seen duplicate payments happen simply because the invoices look-alike. Just to show you how costly these mistakes can be, IBM estimates that the US loses around $3.1 trillion every year due to human error and bad data. 

Then the collateral damage of the erroneous data is that it destroys the company's reputation. And the damage control will still cost more money. Automation eliminates this problem altogether. The automated AP system uses Optical Character Recognition to extract the relevant data from both the digital and scanned invoices. I'll show you how this tech works later in the article.  

High Invoice Volume

On average, a small to mid-sized company manually processes an invoice in around 25 days. Now imagine how long it'll take to process hundreds of invoices. The result is the loss of pre-payment discounts, high processing costs, and late payments that can kill the company's reputation. 

An AP automation software receives and tracks an invoice in real time, and makes sure the right person receives the invoice for approval at the right time. This cuts the processing time to around 2-5 days per invoice. The high speed and efficiency cut the processing time by around 80%. According to the Aberdeen Group, the time savings results in around 18% fewer days payable outstanding. 

Cost Savings

When I ran numbers for a mid-sized portfolio, I discovered we were spending $12.90 per invoice just on labor and materials. That's before you factor in the hidden costs. But when you switch to automated AP, the combination of reduced human labor, high speed, high accuracy, and high efficiency automatically results in cost savings. Here is a simplified breakdown of the savings. 

Reduced Invoicing Costs

Without automation, every invoice has to pass through multiple hands. Someone has to open the mail, log the invoice, make copies, route it for approval, and then physically file it. According to APP2P Network, processing 5,000 invoices manually costs around $64,500 per month. However, with AP automated software, the cost drops to about $8,850 a month. That's roughly 85% in savings. In my experience, most property managers see payback within six months. 

Better Early-Payment Discounts

Most vendors offer 1-2% discounts for paying early, and in property management, where you deal with volumes, those savings really add up. According to IOFM, most businesses only capture about 21% of available early-payment discounts. Even worse, 12% don't capture any. 

A survey by PayStream Advisors found that 31% of businesses miss those discounts because of delays in manual routing. But with an automated AP, invoice approval routes are instant, and you get alerts for every pending payment. It gives you the speed you need to hit the early-payment deadlines. 

Reduced Data Preservation Costs 

Data storage is another hidden expense most teams overlook. The IRS recommends keeping financial records for 7 years, which sounds fine until you realize what that means physically. In a normal PM firm, you might have a room after room lined with filing cabinets. But if you do the math, you’ll realize that each five-drawer cabinet costs over $2,600 a year just to maintain, based on figures from North Dakota's IT Department. 

That includes floor space, filing time, and ongoing maintenance. So, having about twelve file cabinets in an office will cost over $31,000 yearly just for storage space, organization, and retrieval time. Meanwhile, cloud storage gives you a terabyte for less than $7 a month. That's enough to store years' worth of documents, with backups, fast search, and no risk of physical loss. Even better, most AP software has storage fees already included in the subscription plans. 

Reduced Risks of Fraud

No business is safe from fraud anymore. The latest AFP Payments Fraud Survey shows that 78% of companies were hit last year, and the trend is only getting worse. And the losses aren't pocket change. The ACFE estimates that businesses lose around 5% of their annual revenue to fraud. There are also the legal fees, regulatory fines, audit costs, and higher insurance premiums, which are costs that come after the fraud is handled. 

That means one fraud incident can cost triple the actual theft amount. What really shocked me, though, was realizing how much of that fraud starts from the inside. Trusted employees account for over 30% of payment fraud cases. In one of the property management companies I worked with, I once caught an accounting clerk creating fake vendor accounts. She'd process invoices for made-up maintenance work. 

Then there's the 65% from external scammers who know how to exploit gaps in your AP processes like overbilling and fake invoices that look exactly like the real one - same logo, layout, and language. Another fraudster's playground is a decentralized manual AP.  When multiple people in different locations are approving and paying invoices, the risk multiplies. Thankfully, an automated AP is centralized. Every invoice follows the same digital path: submitted online, routed for approval, and logged with a full audit trail. 

You can track each payment from start to finish. Nothing gets paid unless it's verified. One of the best features is automated invoice matching. The system checks every invoice against purchase orders and goods received. That one feature eliminates duplicate payments, which, surprisingly, is one of the most common ways fraud creeps in. 

Now with AI tools built into platforms like LeapAP, fraud prevention is a step further. Built-in features like duplicate prevention, user-based access controls and security alerts all help reduce the fraud risk. And once fraud attempts drop, the insurance premiums reduce. 

Core Components of an Automated AP Workflow

For the automated AP to replace the manual AP processes, it must follow the normal AP cycle. Usually, the cycle starts with invoice receipt, capture the data, match the data, approve the invoice and make the payments.  After multiple transactions, then you'll have analytics and reporting. So, for these steps to be automated, the AP system has the following core components.

Invoice Data Capture

A good AP automation system needs to handle the wide variety of invoice formats and delivery methods it will encounter in the real world. To ensure fast, accurate, and scalable data extraction, it should combine multiple technologies and adapt its approach based on the input.

Key techniques a strong AP automation system should use:

• PDF Text Extraction: Efficient and accurate for system-generated PDFs that contain embedded text.
• Optical Character Recognition (OCR): Essential for scanned documents or images, allowing the system to convert visuals into readable text.
• AI-Powered Field Detection: Machine learning models trained to identify key fields, even when formats vary widely.

The system should also adapt based on:

• File Type: e.g. Clean, digital PDFs, Scanned documents or faxes, photos of paper invoices
• Delivery Method: e.g. Emails from accounting or ERP systems, Manual uploads by staff, Automatic retrieval from vendor or utility portals

By combining these techniques, a good AP automation system can deliver accurate data capture and streamline the payables process, regardless of how invoices arrive or what they look like.

Approval Routing & Audit Trail

After the AP automation system captures the invoice data, the AP shifts toward fraud prevention. Most modern AP platforms come with a dedicated vendor portal. Vendors can log in to a secure web interface to submit invoices electronically, check their payment status, and update banking and contact information on their own. So, to prevent fraud in these submissions, the system uses multi-factor authentication, and maintains detailed audit logs. 

That means only verified vendors can submit invoices. After the system captures the submitted invoices, you have user-level permissions that make sure only authorized users can approve payments. This gives you full traceability of the money flow.

ERP/PM Software Integrations

I've worked with several ERP systems over the years, and I can testify that they're powerful tools. In fact, according to the latest data, around 89% of companies see ERPs as the primary tools for finance and accounting, handling everything from sales and forecasting to general ledger, accounts receivable, and, of course, accounts payable. 

However, ERP systems are not purpose-built to address the nuanced demands of accounts payable workflows. They don't capture invoices automatically, they can't identify duplicates and errors, and they don't route documents for multi-level approvals. 

Don't get me wrong. ERPs excel at what they're designed for. They track every property transaction, manage tenants/owners, and generate reports. That's something AP automation tools just aren't built to do. So, it's not a matter of choosing one over the other. It's about making them work together. That's why most AP teams, including yours, should supplement the ERP with a dedicated AP automation platform like LeapAP. 

LeapAP plugs right into the ERP system and syncs everything like vendor profiles, PO numbers, and GL codes. Same goes for invoice statuses, approvals, and payment data. No more exporting, re-keying, or cross-checking between tabs. The software is compatible with Yardi, Buildium, Shiftsuite, Condo Manager, Rent Manager, Xero and QuickBooks.   

E-Payments & Reconciliation

At the end of the day, after all the approvals and validations, you still have to do the most important part: pay the vendor. Traditionally, PM firms used to write checks and make wire transfers. However, according to the Association for Financial Professionals, checks were hit by fraud 66% of the time, and wire transfers weren't far behind at 39%. That's probably why businesses are shifting towards electronic funds transfer: to reduce fraud and increase control.

However, as a person who has been in accounting for years, understands about payment tampering, and knows that a third of fraud happens from within, I don't blame checks. I blame having the automated AP do all other things and leaving payments to be handled manually. So, at the very least, I think any AP software should support e-payments and integrate with both your ERP and payment processor. 

One of the biggest advantages of LeapAP is that it has a built-in payments module. It handles the entire process - scheduling and executing ACH payments, virtual cards, and yes, even checks. You don't need to hop between banking systems and rely on spreadsheets to track what's been paid. And to make things even smoother, vendors access a portal where they can log in to check their invoices and see if a payment has been sent.

Key Features Property Managers Should Demand

After years in property management, I've learned the features in an automated AP that matter most for property managers. In fact, those specific features were the main reason your company should opt for LeapAP software over other options. Here are some of these features. 

• Utility invoice auto-download: Manually downloading utility bills from dozens of portals, such as gas, electric, water, and sewer, for each property is a time killer. So, make sure the AP system connects directly to the utility company portals and pulls invoices automatically.
• Duplicate-payment prevention: The system should flag potential duplicates before payment processing. It should check vendor names, invoice numbers, amounts, and dates. For instance, it should catch variations like ABC Plumbing versus A.B.C. Plumbing Inc.
• Multi-bank, multi-entity support: If you manage properties under different LLCs or bank accounts, the software should keep it all straight. For example, with LeapAP, you can manage properties across different states and in both Canada and the US, through different LLCs. Each entity has its own bank accounts, its own books, and its own compliance requirements. But the AP system handles this complexity seamlessly.
• Strong customer support: As good as any product is, there will always be the need to get help. That’s why you need to ensure that your AP solution will be there with a fast and thorough response. If you’re wondering how LeapAP’s users feel about them, just do a Google search and see for yourself! 

Step-by-Step Implementation Roadmap

I've implemented AP automation at seven different property management companies. Each one taught me something new about what works and what doesn't. A successful rollout requires planning, alignment, and the right team to carry it forward. I've been through this process myself, and here's how I recommend approaching it.

Readiness Audit

Start by taking a hard look at your current AP process. Map everything out - how invoices are received, who handles approvals, where the delays happen, and how payments are made. You'll probably find manual bottlenecks, error-prone tasks, or approval steps that take way too long. This step gives you a clear baseline of where you're wasting time and money. From there, set your goals. 

Next up, think: whare are my goals? Are you trying to speed up processing times? Cut costs? Improve compliance? Your goals will shape how you choose your solution and what features matter most. Once your priorities are clear, assemble a cross-functional team to lead the project. That might mean pulling in people from AP, IT, finance, and senior management. I also suggest you include skeptics in the implementation team. They help bring out the small perspectives that the others leave out.  

Data Migration

Migrating your data is where things can go sideways if you're not careful. Vendor data migration nearly killed our first implementation. Duplicate vendors, incorrect addresses, and missing tax IDs created chaos. Make sure to clean your vendor lists, check for duplicates, and correct old records before pushing anything into the new system. 

Next comes integration. Your AP automation tool needs to connect seamlessly with your ERP. As I said, LeapAP integrates with ERP systems without a hitch. But I suggest you still run tests to make sure data synced properly - vendors, GL codes, invoices, approvals, all of it. Don't skip this step.

Pilot Property Rollout

Before going all-in, if you can, run a pilot test. You can test on a pilot scope via just a portion of your property portfolio, a handful of users, and a narrow slice of invoice types. You want to balance not jumping into too deep, but you also want a representative sample size. 

Running a pilot helps you catch issues with invoice formats, approval workflows, and user access. More importantly, it lets you fine-tune the system to fit your specific needs. 

For instance, you'll know how to customize workflows on who sees what, who approves what, and how exceptions are handled. Since property management is often a regulated industry, you'll also be able to do all configurations for compliance at this stage. 

Training & Change Management Tips

This part makes or breaks the entire rollout. If your team doesn't understand the system, they won't use it properly. Hold live workshops, show real use cases, and walk through scenarios they'd actually deal with. 

The goal isn't just to teach them how to use the software. It's also to help them see how it makes their jobs easier. For instance, when someone catches a duplicate invoice using the new system, make sure everyone knows about it. This will make the entire team love the system, and the learning curve will be simpler. 

ROI & Metrics to Track

Once you've got an automated AP system in place, the real question becomes: Is it actually working? If you're not tracking and analyzing your metrics regularly, you won't know what's improving or what's still broken. That's why you should make a habit of pulling detailed AP reports every month. Here are the key metrics I always watch:

• Volume of received invoices: It gives you a sense of the workload your AP team is handling and establishes a baseline for everything else. From there, compare how many invoices were actually processed. If you're receiving 100 invoices daily but processing only 85, something's wrong. 
• True cost per invoice: When calculating the cost per invoice, include everything, from software subscriptions, IT support, and staff salaries, to hardware, overhead, and even the cost of paper if you're still receiving any manual invoices. 
• Cycle time: It tells you how long it takes to process an invoice, from the moment it hits the system to the time it's approved, paid, and archived. Long cycle times mean you're getting stuck somewhere.
• Captured discounts: Most vendors offer early-payment discounts. Track the total discounts available, discounts captured, and discounts missed. Then look at why you missed them. Maybe it was late approvals, miscommunication, or just slow processes.
• Rate of errors: Track the number of incorrect payments made in a given time frame, like one month, then divide that by the total number of invoices paid. 
• Penetration of electronic invoices: This one is huge for calculating AP automation ROI. The more invoices you receive electronically, the faster and cheaper your process becomes. If you're still getting paper invoices or PDFs attached to emails, that means someone has to scan or key them in, and that eats into your cost and time savings. 

Frequently Asked Questions

Do I Need the Help of IT Technicians for AP Automation?

From my experience, you won't need IT support for the day-to-day use of modern AP systems. Most of them, LeapAP included, are designed with non-tech users in mind. The interfaces are intuitive, and vendors usually provide hands-on support during onboarding. 

That said, you'll want your IT team involved during the initial setup, especially when it comes to integrating the AP platform with your ERP. They'll also help with configuring settings, setting up user permissions, and making sure the system runs smoothly. Once everything's up and running, your AP and finance teams can handle most of the work independently without needing to call in IT every time you process a payment or onboard a new vendor.

Is Automated AP Secure?

Yes, and honestly, it's more secure than manual AP processes. With paper-based workflows or scattered email approvals, it's easy for things to fall through the cracks and get manipulated. With automation, you have tight controls. Automated AP includes data encryption, role-based access controls, and detailed audit logs, so every action is tracked and traceable. You can set up clear segregation of duties, making sure that no single person can approve and release a payment on their own. Good systems like LeapAP also include built-in fraud detection tools powered by AI. 

Final Thoughts

Automated AP is the future, no doubt. The software beats manual processes in every aspect, from cost reduction, time saving, and accuracy to security and reporting. The integration of AI into these systems is even making things better, as the software can learn over time and know when anything is unusual or suspicious. But just like any other new tech, there are many players coming to the automated AP market, and some of the systems aren't as good as you might expect, while others aren't really designed for property management. 

So, to avoid all the hassle of trying different systems and risking data compromise, I suggest you go for a tried, tested and proven AP software like LeapAP. The software is already trusted by major property management companies in Canada and the US, like Colyvan Pacific, CPE Property Management and Apollo Property Management. I can guarantee that the system is secure, easy to use and has every feature property managers need.