When upgrading or integrating your accounts payable (AP) systems, one technical decision will shape the speed, accuracy, and flexibility of your operations: Should you use flat-file integration or APIs?
At first glance, this might seem like a back-end IT decision. But for finance leaders, it has real-world consequences — from how quickly invoices get paid, to how reliably your systems exchange data, to how much time your AP team spends fixing errors caused by manual handoffs.
In this blog, we’ll explain the key differences between flat-file and API-based integration, explain how each approach works in an AP environment, and help you decide which method best aligns with your automation goals, compliance needs, and team capacity.
A flat file is a simple, structured way to transfer data between systems, commonly used in legacy and batch-based accounts payable (AP) integrations. In flat-file setups, data is exported from one system in a specific format, then imported into another, often through scheduled uploads or file drops.
Flat-file integration is popular because it’s easy to implement and doesn’t require real-time connectivity. However, it can lead to delays, manual reconciliation, and version-control issues, especially as invoice volumes scale or compliance requirements tighten.
Flat file integration is the process of exchanging structured data between systems using flat files—typically in bulk, on a set schedule (e.g., hourly or daily). In accounts payable, this approach is commonly used to send invoice or payment data from one system to another using standardized formats like CSV, TXT, or XML. The process works by exporting data into a flat file, transferring it via a secure protocol like SFTP (Secure File Transfer Protocol), and allowing the receiving system to read and import the data. Because flat files don’t require a live system connection, they’re often used in legacy finance environments where real-time integration isn’t available or practical.
Flat file integration remains popular in AP teams that deal with high volumes of transactions, depend on ERP systems with limited API support, or prioritize batch processing. However, it can introduce delays, data mismatches, and reconciliation challenges — especially as businesses scale and require faster, more automated workflows.
API integration in accounts payable refers to the real-time connection between finance systems, such as ERPs, invoice automation tools, or payment platforms, that allows data to move instantly and automatically. Unlike flat-file integrations that rely on scheduled file transfers, APIs enable seamless, continuous data exchange with no manual uploads or delays. This makes AP processes faster, more accurate, and easier to scale as businesses grow.
According to a 2023 report by Deloitte, companies using real-time API integrations in finance operations saw 27% faster processing times and 33% fewer data errors compared to those using file-based systems.
| Feature | Flat-File Integration | API Integration |
| Data Transfer Method | Data is sent in large files (CSV, TXT, XML) on a set schedule (e.g., hourly or nightly). | Data flows immediately between systems as events occur — no waiting for scheduled uploads. |
| Speed & Efficiency | Slower. Processing happens only when the file is transferred, causing delays in invoice status updates or payment processing. | Fast and continuous. Enables instant updates across systems, reducing delays and improving responsiveness. |
| Error Handling | Errors (e.g., file format issues or missing data) are often discovered after the file is processed, leading to rework and delays. | Errors can be caught and corrected instantly, improving accuracy and reducing reconciliation efforts. |
| Scalability | Limited scalability. High transaction volumes increase file size and processing time, making systems harder to manage. | Highly scalable. Designed to handle large volumes of real-time transactions across multiple systems without performance loss. |
| System Compatibility | Often used with legacy systems that don’t support APIs. Easier to set up initially but may lack flexibility. | Requires modern systems or middleware. Needs initial development but supports flexible and future-ready integrations. |
| Maintenance & IT Involvement | Requires ongoing file format management and manual testing when system updates occur. | Requires upfront development and testing, but once set up, it’s easier to maintain and adapt over time. |
| Automation Potential | Supports partial automation but still involves manual steps (e.g., uploading files, triggering batch jobs). | Enables full AP automation — from invoice capture to payment processing — with less human intervention. |
| Visibility & Control | Lower visibility. Data updates happen in chunks, making it harder to monitor in real-time. | High visibility. Real-time updates give AP and finance leaders better insight and control over payment workflows. |
Selecting the right integration approach for your accounts payable function depends on your company’s systems, operational speed, and automation strategy. Here are five essential questions to help guide your decision:
Choosing between flat-file and API integration depends on how your systems work, how fast you need your AP processes to run, and how much you want to automate. Here are some key points to consider:
Older or on-premise ERP systems often don’t support APIs. In these cases, flat-file integration is usually the easier option. However, modern AP automation tools (like HighRadius) offer flexible connectors to help you integrate with legacy systems, even if they can’t use APIs directly.
If your business needs fast invoice approvals, real-time payment status updates, or live cash forecasting, APIs are a better choice. They let data move between systems instantly. Flat files work in batches, which means updates only happen at set times (like once a day). This delay can slow down your AP operations.
APIs show errors in real time, so if something goes wrong, you can fix it right away. Flat files don’t offer immediate feedback. You might not find out about a mistake until after the file is processed, which creates delays and more manual work during reconciliation.
Both methods can be secure, but APIs offer stronger protection by default. They use secure encryption, access controls, and authentication to keep financial data safe. Flat files need extra setup to achieve the same level of security, especially during file transfers.
Flat files are quicker to set up, especially when you’re working with older systems. But over time, they need more manual work and maintenance. APIs take more effort upfront to build and test, but they save time and reduce errors in the long run, especially as your AP process grows more complex.
Flat file integrations may be simple, but they’re not built for speed, scale, or flexibility. As AP teams grow and finance operations demand more real-time insights, batch-based file transfers often create bottlenecks, reconciliation challenges, and delays in payment processing.
HighRadius helps modernize AP integration, whether you’re using flat files today or transitioning toward more intelligent automation. Our platform can ingest flat files in multiple formats (CSV, XML, TXT) and process them in a secure, audit-ready environment. It integrates with your ERP system, validates data, flags mismatches, and enables faster invoice processing without disrupting your existing infrastructure.
By bridging the gap between flat-file legacy systems and modern finance automation, HighRadius enables real-time visibility, reduces manual reconciliation, and simplifies vendor payments — helping you future-proof your AP operations.
Still relying on flat files to manage high-volume AP transactions? HighRadius makes it easy to modernize without overhauling your tech stack. Whether you’re working with CSVs or TXT files, our platform brings automation, visibility, and validation to your AP data — so you can move faster with less risk.
Schedule a demo to see how we simplify flat file AP integration while helping you scale smarter.
File-based integration is a method of transferring structured data (like CSV, XML, or TXT) between systems in bulk using scheduled uploads. These files are typically shared via SFTP or FTP and processed in batches, making it ideal for legacy systems or less time-sensitive workflows.
The most common flat file formats used in integrations include CSV (comma-separated values), XML (structured markup), JSON (for nested data), and TXT with custom delimiters. These files are exchanged through secure channels like SFTP or cloud storage and processed at set intervals.
The key difference between file-based integration and API lies in timing and interaction. File-based integration transfers data in scheduled batches, while APIs enable real-time, two-way communication. APIs are event-driven and allow systems to instantly sync data, offering faster, more dynamic data flow.
While both methods can be secured, API integrations generally offer stronger protection. APIs use token-based authentication, encrypted HTTPS protocols, and better access controls, reducing the risk of breaches compared to traditional FTP or flat file transfers.
Yes, many businesses adopt a hybrid approach—using APIs for real-time, critical processes like invoice validation, and flat file integration for periodic tasks like reporting or data backups. This provides flexibility while balancing performance, cost, and technical resources.
Positioned highest for Ability to Execute and furthest for Completeness of Vision for the third year in a row. Gartner says, “Leaders execute well against their current vision and are well positioned for tomorrow”
Explore why HighRadius has been a Digital World Class Vendor for order-to-cash automation software – two years in a row.
For the second consecutive year, HighRadius stands out as an IDC MarketScape Leader for AR Automation Software, serving both large and midsized businesses. The IDC report highlights HighRadius’ integration of machine learning across its AR products, enhancing payment matching, credit management, and cash forecasting capabilities.
In the AR Invoice Automation Landscape Report, Q1 2023, Forrester acknowledges HighRadius’ significant contribution to the industry, particularly for large enterprises in North America and EMEA, reinforcing its position as the sole vendor that comprehensively meets the complex needs of this segment.
Customers globally
Implementations
Transactions annually
Patents/ Pending
Continents
Explore our products through self-guided interactive demos
Visit the Demo CenterPlease fill in the details below
Please fill in the details below
We have seen financial services costs decline by $2.5M while the volume, quality, and productivity increase.
Colleen Zdrojewski
Trusted By 800+ Global Businesses
