Should you outsource Accounts Payable or keep it in house?
- Introduction
- Why companies consider outsourcing Accounts Payable
- The hidden costs and risks of AP outsourcing
- See how automated AP teams perform against the rest
- The in-house AP model with more control and more responsibility
- The modern alternative with in-house AP automation
- The future of AP isn’t outsourced—it’s AI-driven
- Why automation outpaces AP outsourcing
- How Medius delivers a better AP strategy
Hear what's covered in this article:
As businesses expand and financial processes become more complex, many finance leaders eventually face a critical decision. Should they outsource their accounts payable function or continue managing it in-house? The goal is clear: reduce overhead, improve efficiency, and maintain strong financial oversight. The challenge lies in choosing the right strategy to support long-term growth and compliance.
There are clear differences between traditional AP outsourcing and modern in-house automation. While outsourcing promises short-term cost savings, automation platforms like Medius deliver long-term value by maintaining visibility, strengthening control, and improving scalability.
Why companies consider outsourcing Accounts Payable
Outsourcing has long been a popular choice for businesses seeking to reduce the manual burden of AP tasks. The appeal is understandable. By shifting responsibilities like invoice entry, approval routing, and payment execution to a third party, companies often expect to save money and free up internal bandwidth.
Some of the expected benefits of AP outsourcing include:
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Reduced payroll and lower operational costs
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Faster onboarding of AP staff and processes
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Access to specialist skills and best practices
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A simplified operating model for non-core functions
For companies with high volumes of invoices and limited internal resources, this can feel like a logical next step. In certain cases, especially when AP maturity is low, outsourcing can bring much-needed structure and consistency.
In industries where finance is considered a support function rather than a strategic driver, outsourcing AP may also align with broader business goals around lean operations and external partnerships.
However, the reality is often more complex.
See how automated AP teams perform against the rest
If you’re weighing the value of outsourcing vs. modernizing in-house, it helps to know how high-performing AP teams actually operate. The “Medius AP benchmark report” gives you real-world data on invoice cycle times, cost per invoice, error rates, and more, so you can see the impact modern automation delivers at scale.
The in-house AP model with more control and more responsibility
Managing AP internally gives companies greater control over their financial processes. Teams can collaborate closely across departments, spot anomalies faster, and make adjustments in real time. This is especially valuable for companies operating across multiple jurisdictions or those with complex vendor relationships.
In-house teams also gain deeper insights into invoice patterns, approval bottlenecks, and payment performance. These insights can feed directly into procurement strategies, supplier negotiations, and budgeting efforts.
However, traditional in-house AP often requires significant manual work. Without the right tools, teams may be buried in paper invoices, email threads, and spreadsheet-based reporting. This not only slows down payments but also increases the risk of errors, fraud, and missed compliance deadlines.
Historically, this has made in-house AP feel like the slower, more expensive option. But things have changed.
The modern alternative with in-house AP automation
Today, there is a third option that delivers the best of both worlds. Rather than outsourcing AP to a business process outsourcer (BPO), companies can modernize their internal teams using intelligent AP automation.
With platforms like Medius, finance departments can eliminate manual tasks, reduce invoice processing time, and increase accuracy. At the same time, they retain full control over approvals, spend visibility, and data governance.
Here is what that looks like in practice:
Touchless invoice capture
AI-driven tools extract and validate invoice data without manual input.
Smart matching and routing
Invoices are matched to purchase orders, receipts and/or contracts
and sent to the right approvers based on custom rules.
Real-time dashboards
Finance leaders get instant insight into cash flow,
exception trends, and supplier performance.
Audit-ready records
Every step is logged, making it easier to comply
with audits and internal controls.
By digitizing invoice workflows and integrating with existing ERP systems, automation platforms reduce reliance on manual processes and eliminate silos between departments.
Rather than relying on a third party to manage sensitive financial processes, automation gives companies the tools to do it better themselves.
The future of AP isn’t outsourced—it’s AI-driven
Thinking about outsourcing your AP function? Before you commit, see what leading finance teams are doing instead. The SSON white paper, “From Automated to AI-Driven: The Future of AP Automation,” breaks down how AI transforms accuracy, speed, and scalability, without sacrificing control. Start building an AP operation that evolves with your business, not away from it.
Why automation outpaces AP outsourcing
Outsourcing may reduce the need for internal AP staff, but it does not fundamentally fix the problems that bog down AP processes. Manual invoice handling, poor data quality, and fragmented systems still exist. They are just handled elsewhere.
Automation addresses the root cause. It restructures how AP operates, from intake to payment. Errors are caught earlier, approvals move faster, and processes become consistent across locations. This leads to measurable improvements in speed, accuracy, and compliance while still supporting goals of headcount reduction if that remains an important outcome.
It also supports better vendor relationships. Timely payments, fewer disputes, and faster resolution of exceptions contribute to stronger supplier trust and better terms.
More importantly, automation gives finance teams more time to focus on strategy. With fewer fire drills and manual tasks, teams can spend more time analyzing spend data, negotiating better supplier terms, and supporting broader business goals.
How Medius delivers a better AP strategy
Medius offers AI-powered AP automation that helps companies reduce invoice cycle time, increase accuracy, and scale operations without expanding headcount. Our platform combines intelligent data capture, smart workflows, and real-time reporting into one seamless solution.
Unlike traditional outsourcing, Medius keeps you in control. You get full transparency into every transaction, without the delays or data silos that come with third-party vendors. And because our system learns from your historical data, it keeps getting smarter over time.
Organizations that choose Medius are not just streamlining AP. They are building a more agile, cost-efficient finance function that can adapt to change and support growth.
Ready to transform your AP process?
See how Medius can help you reduce costs, increase control, and modernize your accounts payable operations.
