Guide · AI
How to automate invoice processing with AI, step by step
At many companies, accounts payable still works like this: an invoice arrives by email, someone opens the attachment, types the amount, date and vendor into the accounting system or a spreadsheet, and forwards it for approval. That takes a few minutes per invoice and much longer whenever something doesn't match. This guide shows how to automate invoice processing with AI in five steps: invoices are captured, read, checked and routed for approval automatically. Approving the payment stays with a person.
Automate invoice processing with AI in five steps
Step 1: Send all invoices to one place
You can only automate what arrives in one place. Set up a dedicated mailbox, such as invoices@ at your domain, and ask vendors to send invoices only there. Invoices that land with individual employees get forwarded. Paper invoices are scanned into the same mailbox.
Step 2: Check the format first
Not every invoice needs AI. Some vendors send structured invoices that already contain the vendor, invoice number, amounts and line items as data, for example through EDI or a vendor portal. If you have a German entity, this matters even more: since January 1, 2025, businesses in Germany must be able to receive structured e-invoices from other German businesses. Structured data only needs to be read, not recognized. AI comes in for regular PDFs and scans. The workflow checks the format first and picks the right path.
Step 3: Extract the data
For PDFs and scans, the AI extracts the fields your accounting team needs: vendor, invoice number, invoice date, subtotal, tax, total, due date, payment details and, if present, your purchase order number. It matters that the AI reports how confident it is for each field. Fields with low confidence don't go into accounting automatically. They go to a person.
Step 4: Run the checks automatically
Before an invoice goes out for approval, the workflow can check a lot on its own:
• Are required details missing, such as the PO number your team asks vendors to include?
• Has this vendor's invoice number already been processed? That catches duplicates.
• Do amounts and quantities match the purchase order and, where you track it, the receiving record? Accountants call this a two-way or three-way match.
• Do the payment details differ from what you have on file? That is a typical pattern in payment fraud and always goes to a person.
Step 5: Approve and hand off
The checked invoice goes to the approver with all its data, for example a project lead or the owner. Approving takes one click, and questions go back to the vendor. After approval, the workflow passes the data to your accounting software or your bookkeeper and stores the original file according to your record-retention rules.
Which tool to use
There are three sensible routes. The right one depends on what you already use.
Your accounting or AP software. Many accounting and accounts payable tools now offer an invoice inbox and read PDFs on their own. If yours does that and handles your approvals well, it is often the simplest route. A custom workflow pays off mainly when invoices need to be assigned to projects, matched against purchase orders from other systems, or approved in several stages.
Microsoft Power Automate. Power Automate is the automation service in Microsoft 365. A flow starts when an email arrives in the invoice mailbox and reads PDFs with the prebuilt invoice model in AI Builder. You need a Power Automate Premium license for that. Starting November 1, 2026, new or renewed licenses no longer include AI Builder credits. Credits that came with existing licenses remain available through the end of the contract term. After that, you pay for extraction with Copilot Credits. According to Microsoft, one invoice page costs 8 Copilot Credits, which is $0.08 with pay-as-you-go billing. Ready-made approval actions are available in Outlook and Teams.
n8n. n8n is a workflow tool that you can also run on your own servers. That is useful if invoice data should stay in your own infrastructure as much as possible. A workflow picks up attachments from Outlook or Gmail, pulls the text from the PDF, and has an AI return the fields as structured data. It then waits for approval by email, Teams, or Slack with the "Send and Wait for Response" operation. For the AI, choose a provider that offers a data processing agreement, or a model you host yourself.
Before you build
Count for one month: how many invoices arrive, how many are structured, how many are PDFs, how many are paper? That determines how much AI you actually need and what extraction will cost.
What a person should decide
The AI extracts and checks. It shouldn't decide. Approving payment, any change to payment details, mismatches with the purchase order, and coding in unclear cases belong with a person. Decide in advance above which amount a second person approves. The workflow enforces these rules. It doesn't make them.
Where this reaches its limits
With ten invoices a month, a custom workflow rarely pays off. It also gets harder when invoices look very different from each other, have many line items, or need to be split across several projects. Then the share a person has to fix goes up. And the workflow is only as good as the master data behind it: if vendors, purchase orders or payment details are missing, there is nothing to match against.
How aenuma helps
aenuma builds this workflow in your environment, for example with Microsoft 365, n8n, or Make, and passes the data to your accounting system where it offers an integration or API. We test it with real invoices from your day-to-day work. Together, we agree in advance which steps run automatically and where a person approves. Then we introduce the workflow to your team and, if you want, keep supporting it.
If you are not sure yet whether this pays off for your invoice volume, we can sort that out in the first call.
Frequently asked questions
Do I need AI if all my invoices are structured?
Not for extraction. Structured invoices already contain the data. AI is more useful for assigning invoices, for example to the right project. As long as PDFs and paper still arrive, you need recognition for that part.
What does extraction with Power Automate cost?
According to Microsoft, one page with the prebuilt invoice model costs 8 Copilot Credits, or $0.08 with pay-as-you-go billing. On top of that comes the Power Automate Premium license. If you still have AI Builder credits from an existing license, those are used first until the end of the contract term.
Can AI post invoices to the books on its own?
Technically, yes. We don't recommend it without a review. A sensible workflow prepares clear-cut invoices and puts everything uncertain in front of a person. Check with your accountant how that fits your internal controls.
Can a workflow catch fake invoices?
It can flag the typical signs: a new vendor, changed payment details, a duplicate invoice number, an amount without a matching purchase order. The decision whether an invoice is legitimate stays with a person, and a call to a known contact at the vendor is still the safest check.
Sources
Overview of licensing, AI Builder (Microsoft Learn)
End of AI Builder credits (Microsoft Learn)
Microsoft Outlook node (n8n Docs)
BMF letter of October 15, 2025 on mandatory e-invoicing (German Federal Ministry of Finance, in German)
By Joshua Schütt, founder of aenuma. Last updated: October 2026.
How many invoices does your team still type in by hand?
Tell us how invoices arrive at your company today and who approves them. We will tell you which part can be automated and where a person should decide. Not sure where to start? The Time Sink Check shows which task makes a good first workflow.
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