You’re Exposed - The Vulnerability of AP Processes

exposing the risk of accounts payable processes

It’s hard to put a price on time. But occasionally, you know what it costs you. Like you when you take your car to a mechanic and they fix something that would have taken you hours, maybe days. Even if you know you can do it, is it really the best use of your time?

And there’s risk in taking on the job yourself. You could make a mistake and cause more problems.

Accounts payable isn’t quite the same as working on your car, but there are some similarities. Sure, you’re an expert, but when you take on tasks yourself, you’re giving up the opportunity to provide strategic value, like doing a deep dive into your spending data.

And there’s the heightened exposure to risk (and not just fraud); risk of inefficient processes, risk of disrupting the supplier relationships and work that keeps your company moving forward and growing. For example, when your invoicing processing and payment system causes problems, suppliers become frustrated with the friction. Cash flow management is disrupted when bills are not paid at the correct time. Unpaid invoices interrupt your supply chain. See the pattern?

All of these problems drain your time and increase your risk. But there’s hope. Using tools to automate your AP process can eliminate human errors, interruptions, and angry vendors.

But first, it’s essential to identify how your company is exposed. Data and financial theft are often the first things that come to mind when you think of risk. But your business could lose valuable vendors who are being negatively impacted by your payment timeline. Or you’re not effectively managing your cash flow to take full advantage of what’s available and needed.

With the right tools and workflow, you can mitigate risk and make AP an operational powerhouse.

Don’t Get Faked Out

Hackers and scammers aren’t always sitting in dark rooms behind a dozen screens crafting code to steal your data. Sometimes they’re hiding in plain sight using routine processes to take advantage of your firm. The risk problems of scamming are amplified when AP processes are manual. For example, if invoicing processing relies on people in your department to read, review, and verify each document, things will fall through the cracks.

It’s the missed information that creates an opportunity for scammers to generate fake invoices and bills. They can replicate documents and make line items look real enough that when your team sees them, they may not notice anything wrong, especially if they’re swamped with other work. Sometimes errors on bills or overpayments are genuine mistakes but missing them shorts your company cash until you receive a refund.

This is not a cheap mistake, costing close to $100,000 on average.


Occasionally, the scammers are sitting right next to you. AP employees have frauded their own companies before. They understand your processes and how to work loopholes to avoid being detected. If your systems are manual, it’s even more difficult to prevent this type of fraud.

Automated accounts payable systems can detect incorrect invoices. The technology can catch duplicates, errors, or fakes and bring them to your team’s attention. So, you save costs and reduce the likelihood of losing money to fraud. In addition, internal theft is discouraged because employees know they’re likely to be discovered.

Your Suppliers Want Easy

The past 18 months have been a rough period for supply chain management. The pandemic has strained the flow of goods and services. It’s created a demand for companies to make their relationships flexible and seamless.

Suppliers think about how easy it is to do business with you more than ever. And your relationship with them could hinge on something as simple as your invoice processing a payment.


A manual AP environment can create situations where suppliers spend excessive time following up with your team, waiting on payment, or resending invoices. At the very least, they’ll be upset with you. In a worst-case scenario, a supplier may withhold product that will interrupt your supply chain. When you move to an automated process, you can create better outcomes. By making the workflow easy for your suppliers, you can build a great working relationship. They’ll know they can rely on you.

 Now, when it’s time to renew a contract, you’ll have results like that will help you create better terms and prices from vendors.

Poor Money Management

Good financial management is dependent on seeing the big picture. Knowing where money is coming and going helps you make wise decisions.

Accounts payable has a significant role to play in the financial planning of a company.


And when it’s operated manually, it will be challenging to see what’s really happening. Understanding which invoices are outstanding, which are in the process of being paid, and other critical data helps your company make smart moves with cash management.

When you’re missing this information, it leads to budget problems. Or your cash forecasting is inaccurate, so you fail to manage your spending strategically. By leveraging automation and understanding the flow of money out of accounts payable, businesses can control cash flow and use it to their advantage. This type of work simply isn’t possible with a manual AP process.

AP Risks Affect Every Part of a Company

The problems created by manual AP processes are not limited to one department. They affect client relationships, production, finance and so much more. Every part of the company hinges on the effectiveness of accounts payable. Implementing an automation solution that can handle the most complex invoice-to-pay and cash management challenges – with accurate straight-through-processing (STP) is the best way to solve these problems.

Mitigating risk in accounts payable is more than preventing fraud. It’s a critical area that can be used to create great supplier relationships and better cash and business management. When AP works well, cost savings can be leveraged and re-invested. Automation can be used to make accounts payable a strategic center of the company. Now, instead of spending your time manually managing AP, you’re driving solutions for the entire business.

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