MFT Gateway is a hosted Software as a Service (SaaS) solution that enables file exchange over the AS2 or SFTP protocol, without the need to install or maintain.
EDI
Setting Up AS2 for Automated Invoice Processing: A Simple Guide
Set up AS2 for automated invoice processing with this simple guide. Streamline EDI, boost accuracy, reduce manual work, and speed up payment cycles.
Hirudinee Liyanage
Published: 26 Jun 2025
In today’s world, businesses are constantly seeking ways to cut back on repetitive work, tidy up their books, and keep cash flowing smoothly. Invoice handling is a major part of every business that must be addressed to achieve maximum efficiency.
Plenty of teams still fall back on outdated habits: pinging around PDF files, manually typing line-item totals, or matching payments to bills with a calculator. The good news is that AS2 invoice automation, when set up correctly, can eliminate that grunt work and accelerate the time between invoice receipt and payment, while keeping everyone compliant.
This blog explains how to configure AS2 for EDI invoice automation, helping businesses streamline invoice processing and reduce manual tasks.
What Is AS2 and Why Use It for Automated Invoice Processing?
AS2 (Applicability Statement 2) is a trusted protocol for sending EDI documents securely over the internet. It bundles encryption, sender/receiver IDs, and MDN receipts into a single package, allowing sensitive files, such as invoices, purchase orders, and shipping notices, to move safely from partner to partner.
When AS2 handles EDI invoices, you gain:
- Real-time, secure delivery of invoice files (e.g., EDI 810, EDIFACT INVOIC)
- Automated parsing and importing into accounting systems
- Fewer invoice errors and reduced manual data entry
- Faster payment cycles through quicker invoice exchange
If you’re looking to automate invoice workflows and eliminate paper/email invoices, AS2 is a smart choice.
Step-by-Step AS2 Setup Guide for Invoice Processing
Step 1: Choose the Right AS2 Software or Service
First, you need an AS2 solution. You have two main options:
-
On-premise AS2 software: Ideal for enterprises with dedicated IT teams.
Example: AS2 Gateway by Aayu Technologies is one of the best on-premise AS2 solutions available today. -
Cloud-based AS2 services: Easier to manage, lower upfront cost, and faster to deploy.
Example: MFT Gateway by Aayu Technologies is a top SaaS AS2 solution.
Both MFT and AS2 Gateway support critical features such as:
- Certificate-based encryption
- MDN (Message Disposition Notification) handling
- Logging and auditing
- Scheduled/automated processing
- EDI file routing
Step 2: Generate and Exchange AS2 Certificates and Partner Details
To ensure secure communication, both parties must exchange public certificates.
- Generate a private/public key pair
- Share your AS2 Identifier, public certificate, and AS2 URL with your trading partner
- Receive the same from them and configure it in your system
This setup enables encrypted and signed document exchange, ensuring compliance and security.
Step 3: Test AS2 Connections with Your Trading Partner
The next step is to verify the AS2 connection:
- Test the connection using a dummy invoice or sample EDI file
- Verify that MDNs (delivery receipts) are being received properly
Step 4: EDI Integration
With your AS2 pipeline in place, now focus on actual EDI invoice processing.
Common invoice formats include:
- X12 810 (used in North America)
- EDIFACT INVOIC (used globally)
To handle these formats, use an EDI translator or middleware that maps invoice data to your accounting or ERP system.
Aayu Technologies offers a solution called “EDI Generator” that receives POs and generates corresponding invoices.
Define business rules like:
- Match incoming invoices with PO numbers
- Validate item prices, quantities, and taxes
- Flag any discrepancies for review
- Automatically post approved invoices to accounts payable
The EDIG team at Aayu Technologies helps and guides the customers through all the steps to make this process more efficient. Here is a demonstration of setting up an EDIG account.
Step 5: Automate Acknowledgments and Exceptions
Once an invoice is received successfully, your system should:
- Automatically send back an MDN
- Optionally send an EDI 997 (functional acknowledgment)
- Log or alert any failures or schema mismatches
For outbound invoices:
- Validate the file before sending
- Ensure it’s signed and encrypted
- Route it to the correct partner endpoint
Automation at this layer minimizes human intervention and enhances data accuracy.
Benefits of Using AS2 for Accounting and Invoice Automation
Let’s look at the business impact of configuring AS2 for accounting and invoice operations:
Faster Payment Cycles
Invoices are delivered instantly to the customer’s system, improving on-time payments and cash flow.
Reduced Manual Entry
Eliminate PDF/email invoices, teams no longer need to retype data into ERPs.
Improved Accuracy
Automated checks validate POs, line-item totals, and tax data, catching errors early.
Audit Trails and Compliance
AS2 logs every transaction and MDN, offering a verifiable record for audits.
Scalable and Partner-Friendly
Once configured, the AS2 pipeline easily supports new partners and high invoice volumes
Final Thoughts
Setting up AS2 invoice automation may sound technical, but with the right tools and guidance, it becomes a high-ROI investment. Whether you’re a small business streamlining AP or a large enterprise optimizing B2B transactions, invoice EDI AS2 solutions can help cut costs, save time, and improve partner relationships.
The key is to combine the secure AS2 transport layer with reliable EDI invoice processing and tight integration into your finance systems. Once it’s in place, you’ll wonder how you ever managed invoicing without it.
Hirudinee has worked on a variety of products at Aayu throughout her career and has hands-on experience in planning, designing, and executing testing activities. She is the QA manager of the team with more than 7 years of experience in delivering top-notch software solutions. Outside of work, she loves traveling, trying new foods, and her dogs.
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