If you are serious about seeking accounts payable automation solutions for your organization, you need to have a solid grasp on the various options available to you for delivery of this solution and what characteristics each option possesses. 

As these options have become more widely used and accepted by organizations around the world, there have been a multitude of vendors jumping on the Software as a Service (SaaS) bandwagon. However, all SaaS solutions are not created equal, and there is currently a proliferation of “fake” SaaS offerings that don’t provide the benefits of true SaaS.

When deciding which option to go with for AP automation in your organization, consider the three categories that AP automation solutions generally fall into: 

  • On-premises software solutions – Licensed, installed, and maintained by your IT team.
  • Cloud solutions – Software that is licensed, installed and maintained by the client, but hosted by a third party. You may see this sometimes referred to as “Hosted” (we also call that “fake SaaS.”)
  • SaaS solutions – True multi-tenant solutions, built for the Internet and designed for ease of use and low maintenance. The best providers will include best practices and full user support with ongoing training.

The following grid is taken directly from Chapter 4 our new AP automation eBook, It’s Time You Automated Accounts Payable – Here’s How, which is available for free here. It explains the differences and advantages of each category.

  On-premises software Cloud Solutions SaaS

Client owns the data center and is responsible for all associated costs.

On-premises software running in someone else’s data center. Often, data center responsibilities are handled by separate vendors. Platform hosted on vendor’s data center. Vendor responsible for all data center and application performance issues.


As part of broader/major new releases, upgrades usually come at additional costs. Requires internal IT resources and can break customizations.

Same as on-premises.

Regular updates released throughout the year, and they are automatically integrated without additional costs. No internal IT resources required.

Total Cost of Ownership

Investments include: software licenses, hardware and associated infrastructure costs, IT resources, annual maintenance fee for customer support and training. Additional fees for upgrades/new releases. Often, this analysis excludes hardware, required infrastructure costs, and ongoing costs that are not obvious.

Same as on-premises, with the exception of hardware. There are some IT and infrastructure charges. Beware of potential differences between the data center and the software provider.

Some vendors charge a one-time startup fee and a monthly user license (usually a concurrent licensing model). Training and support is included in the monthly service fee from some vendors. Best practices are included. No charge for ongoing maintenance.


Not muti-tenant. Client is responsible for application and customization charges.

Same as on-premises.

All costs are shared across clients using the platform, which saves time and money.

User interface 

Rigid and highly customized.

Rigid and typically standard across all clients.

Web native – built for the Internet. Highly tailorable to the individual.

Client services 

Administration, training, IT, and user support are the responsibility of the client.

Same as on-premises, or may require extra charges for these services.

Comprehensive user/technical support and training are provided by the vendor.

In addition to understanding the technical underpinnings of the technology, you will want to evaluate the projected financial return of the one or two options that make it through your initial screening.

If you have questions about these AP automation options, send a message to and we will gladly offer our expertise.  

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