Accounts payable

Accounts Payable Overview

Learn about how Ottimate automates the accounts payable process

Accounts payable (AP) represents money a company owes to its vendors and suppliers for goods or services that have been received but not yet paid for. It’s recorded on the company’s balance sheet, and the total accounts payable balance is the sum of all outstanding payments due to vendors.

Companies typically have established procedures for procuring goods and services from vendors and releasing payments. This process involves several key documents. For example, if Company A needs to purchase five laptops for a new office location from an IT supplier at a contracted price of $10,000, the process might include:

  • Purchase Order (PO) - A document generated by the purchasing department detailing the equipment to be purchased, including make, model, quantities, and contracted prices. The PO is managed in the company’s ERP software and coded with the appropriate ledger account and other dimensions. Once approved, the company places the order with the vendor.
  • Delivery Note - The IT vendor ships five laptops to the office location. The office manager signs and acknowledges receipt of the five laptops.
  • Invoice - The IT vendor sends a PDF invoice via email detailing the five laptops, listing amounts due, with references to the PO number, delivery note, and the vendor’s contracted payment terms with Company A.

Two-way and three-way matching

Ottimate supports two common document matching workflows to validate invoices before payment:

Three-way matching

Three-way matching compares three documents — a purchase order, a receipt, and an invoice — to verify that what was ordered, what was received, and what was billed all agree.

  1. Purchase Order — Created in your source system (ERP) and synced to Ottimate. The PO defines the items ordered, quantities, and agreed prices.
  2. Receipt — Sent from your source system to Ottimate after goods are delivered. Each PO may have one or more receipts. Receipts confirm the quantity of goods actually received.
  3. Invoice — Created or captured in Ottimate. The invoice is matched against both the PO and receipt to confirm that billed amounts align with what was ordered and received.

Two-way matching

Two-way matching compares a purchase order directly against an invoice, skipping the receipt step. This is common for services or scenarios where delivery verification is not required. POs flagged with is_2_way: true follow this workflow.

Source of truth: Ottimate syncs purchase orders and receipts from your source system (ERP). Your ERP remains the source of truth for these documents — Ottimate receives and stores them for matching and validation purposes.

Prerequisites: The guides in this section assume that purchase order workflows, two-way and three-way matching, and related features have been correctly configured in Ottimate during account onboarding. Contact your Ottimate account team if you need to enable or adjust these settings.

How Ottimate automates accounts payable

Ottimate automates the accounts payable process by:

  • Extracting data - Automatically extract structured data from invoice files
  • Matching documents - Match invoices against purchase orders or delivery notes to validate accuracy
  • Applying dimensions - Automatically apply GL accounts and other dimensions based on the ERP setup
  • Managing approvals - Create and apply approval workflows to automatically route invoices for approval
  • Syncing to ERP - Sync coded invoices back to the client’s accounting software so the correct accounts are debited and credited
  • Processing payments - Automatically make payments to vendors based on contracted terms and post payment information to the accounting software

What you can do with the Ottimate API

  • Sync purchase orders - Send purchase orders from your ERP into Ottimate for document matching
  • Sync purchase receipts - Send receipts from your ERP into Ottimate for three-way matching
  • Export digitized invoices - Access invoices that have been processed through Ottimate’s extraction pipeline
  • Push electronic invoices - Send invoices into Ottimate for coding and approvals
  • Export AP bills - Access completed AP bills (invoices that have been coded, approved, and are ready for export to the ERP)
  • Export payment information - Access payment details for invoices paid through VendorPay (coming Q4 2025)