Accounts payable challenges and best practices to overcome them

Accounts payable challenges are rarely about invoices. They are about control.

Most mid-market finance leaders don’t lose sleep over processing speed. They worry about whether liabilities are fully visible, whether approvals are defensible, and whether month-end numbers reflect operational reality. When invoices live across inboxes, ERPs, and spreadsheets — and approvals depend on reminders — the issue isn’t inefficiency. It’s orchestration.

If your AP process technically works but feels fragile, it isn’t a people problem. It’s a design problem.

Finance doesn’t need more integrations. It needs coordinated workflows — where intake, approval logic, exception handling, and controls operate as one system. Increasingly, finance teams are exploring financial AI agents and modern product expense management platforms to help orchestrate these workflows intelligently — but technology only delivers results when the underlying structure is sound.

When that orchestration exists, visibility improves quickly, risk declines measurably, and ROI becomes visible in months — not years.

This guide breaks down the most common accounts payable challenges mid-market teams face and shows how to solve them through structured best practices first — and automation second. The goal isn’t enterprise complexity. It’s enterprise-grade control without enterprise overhead.

What “good” AP actually looks like

High-performing accounts payable management doesn’t rely on heroics. It relies on predictability.

When AP is structured correctly, it feels calm. You can answer questions instantly. Accruals aren’t guesses. Approval logic doesn’t depend on memory. Audit trails exist without reconstruction.

In practical terms, mature AP environments share three characteristics:

• Invoice intake is standardized and visible from the moment it enters the business
• Approval workflows are rule-based, role-driven, and automatically escalated when needed
• Controls, audit logs, and liability visibility are embedded in daily operations

When these foundations are in place, invoice processing challenges decline naturally. Close cycles shorten. Forecast accuracy improves. And finance shifts from reactive firefighting to proactive governance.

How do you compare? Mid-market AP benchmarks

To determine whether your accounts payable challenges are structural, compare your performance against typical mid-market ranges.

Invoice cycle time (receipt to approval) often falls between 10–20+ days in a manual accounts payable process. Structured workflows reduce this to 5–10 days. When accounts payable automation reinforces clear rules, approval time commonly drops to 1–5 days.

Cost per invoice in manual environments typically ranges from £8–£15. Optimized environments reduce this to £3–£7 by eliminating rework and duplicate handling.

Duplicate invoice payments are another indicator. In disconnected systems, rates often sit between 1–2%. In controlled, rule-driven environments, they typically fall below 0.2%.

If your metrics exceed these ranges, the issue is rarely team effort. It’s accounts payable inefficiencies rooted in intake design, approval clarity, or visibility gaps.

The most common accounts payable challenges — and why they matter

Many common accounts payable problems don’t appear catastrophic. They compound quietly. Over time, they increase risk exposure and operational cost.

Manual invoice processing

In mid-market teams, invoices frequently arrive through multiple channels: email, PDF attachments, portals, and sometimes paper. Data is rekeyed manually into the ERP. Coding relies on individual judgment. Attachments are stored separately.

At lower volumes, the manual accounts payable process feels manageable. As invoice counts grow, invoice processing challenges multiply. Errors increase. Rework expands. Month-end becomes compressed.

The business impact is measurable: higher processing costs, slower close cycles, and greater exposure to reporting inaccuracies.

Disconnected systems

One of the most underestimated accounts payable challenges is fragmentation. The ERP reflects posted invoices. The inbox holds new submissions. A spreadsheet tracks approvals. A shared drive stores documentation.

Finance becomes the reconciliation layer between systems.

This fragmentation limits visibility into liabilities. Forecasting depends on manual aggregation. Accruals become educated assumptions. Leadership reporting requires additional validation.

When systems are integrated but not orchestrated, finance works harder without gaining clarity.

Approval bottlenecks

Approval delays are rarely caused by neglect. They stem from undocumented thresholds and unclear ownership.

When workflows depend on reminders rather than rule-based routing, invoices stall silently. Escalation doesn’t happen automatically. Approver changes create gaps.

The impact extends beyond delayed payments. Supplier trust erodes. Close timelines stretch. Finance credibility suffers.

Approval bottlenecks are not a people issue. They are a workflow architecture issue.

Supplier risk and late payments

Repeated late payments do more than trigger fees. They affect contract renegotiations, willingness to extend favorable terms, and preferred supplier status.

In competitive supply markets, reliability matters. Accounts payable management directly influences commercial leverage. Visibility and timely approvals strengthen supplier relationships — invisibly but powerfully.

Duplicate payments and compliance exposure

Duplicate invoice payments commonly arise in environments where intake is inconsistent and vendor master data lacks structured controls. As invoice volumes increase — especially across multiple entities — exposure grows.

Beyond financial leakage, the larger risk is governance. CFOs must be able to explain, trace, and defend payment decisions. Weak audit trails undermine executive confidence and increase audit stress.

Compliance cannot be layered on at month-end. It must be embedded operationally.

Scaling without scaling headcount

AP scaling challenges emerge when invoice volume increases but hiring budgets remain constrained.

Adding staff may relieve pressure temporarily, but it does not eliminate accounts payable inefficiencies. Sustainable accounts payable process improvement allows volume growth without proportional cost growth.

Scalability depends on structural clarity — not additional effort.

Best practices to overcome AP challenges - and fix the root causes

Effective accounts payable best practices follow a deliberate order.

First, stabilize invoice intake. Limit intake channels and define required invoice fields clearly. When suppliers understand submission standards, exception rates decline immediately.

Second, formalize approval thresholds. Document role-based approval matrices and introduce automatic escalation. When decision ownership is explicit, bottlenecks diminish.

Third, implement structured exception handling. Categorize recurring issues such as missing POs or VAT discrepancies and assign ownership. Measuring exception rates reveals systemic weaknesses and prevents repeated friction.

Fourth, strengthen compliance and fraud controls by embedding them into workflows rather than adding them afterward.

Practical safeguards should include:

• Dual approval for vendor bank detail changes
• Enforced segregation of duties between invoice entry, approval, and payment
• Automatic, timestamped approval logs
• Duplicate detection prior to payment release
• Regular vendor master data reviews

When these foundations are stable, accounts payable automation becomes a low-risk accelerator. Automation works best when it reinforces rule clarity — not when it attempts to compensate for missing structure.

How to evaluate accounts payable automation objectively

Automation should enhance control, not replace governance.

Before selecting any solution, finance leaders should assess:

• Can workflows be configured without heavy IT reliance?
• Does the system enforce segregation of duties automatically?
• Is every invoice traceable from receipt through payment?
• How are exceptions surfaced and managed?
• Does the system support multi-entity oversight without complexity?
• What is realistic implementation time and total cost of ownership?

When rules are defined and visibility is prioritized, automation delivers fast, visible ROI. Without that structure, it simply accelerates existing inefficiencies.

A practical 30–60–90 day roadmap

Large-scale finance transformations sound appealing in theory. In reality, mid-market teams rarely have the bandwidth, headcount, or risk tolerance for multi-year AP overhauls.

What works instead is incremental orchestration.

Rather than replacing systems or redesigning everything at once, this phased approach strengthens structure in layers. Each phase builds control, visibility, and measurable progress — without disrupting daily operations.

Days 0–30: Stabilize and make the invisible visible

The first 30 days are about clarity, not speed. Before improving performance, you need to understand the current state and remove immediate friction.

Focus on stabilizing intake, defining ownership, and establishing a baseline for accounts payable management.

Priority actions:

• Consolidate invoice intake into one or two approved channels
• Publish clear invoice submission requirements for suppliers
• Document approval thresholds by role and spend level
• Map your current approval workflow from receipt to payment
• Identify where invoices typically stall
• Establish baseline KPIs (cycle time, exception rate, duplicate payments, cost per invoice)
• Confirm segregation of duties across entry, approval, and payment release

At this stage, visibility is more important than automation. The goal is to reduce ambiguity. Once intake and approvals are clearly defined, recurring accounts payable challenges become easier to diagnose.

Expected outcome by day 30:

You can see where delays occur, measure your current performance, and explain your approval logic clearly — internally and externally.

Days 31–60: Reduce friction and control risk

With visibility established, the next phase focuses on reducing recurring accounts payable inefficiencies and strengthening controls.

This is where you address the operational risks that create audit stress and supplier friction.

Priority actions:

• Introduce structured exception tracking with standardized reason codes
• Assign ownership for each exception category (e.g., missing PO, pricing mismatch)
• Implement automatic escalation for overdue approvals
• Strengthen vendor master controls, especially for bank detail changes
• Introduce duplicate detection procedures before payment release
• Create a monthly AP performance review using your baseline KPIs
• Identify recurring bottlenecks and address root causes

This phase shifts AP from reactive problem-solving to proactive governance. Exception data reveals systemic weaknesses. Escalation logic prevents silent delays. Controls reduce fraud and compliance exposure.

Expected outcome by day 60:

Approval bottlenecks decrease, duplicate payment risk drops, and recurring issues become measurable rather than anecdotal.

Days 61–90: Scale intelligently and apply automation selectively

Only once intake, approvals, and controls are stable should automation expand.

Accounts payable automation is most effective when it reinforces structured workflows. When applied prematurely, it accelerates chaos. When applied strategically, it delivers fast, visible ROI.

Priority actions:

• Automate invoice capture where data patterns are consistent
• Implement rule-based routing aligned to documented approval thresholds
• Enable real-time visibility into invoice status across entities
• Integrate AP workflows directly with your ERP to eliminate reconciliation gaps
• Configure automated alerts for stalled approvals
• Monitor KPI improvements monthly and compare against benchmarks
• Refine exception rules to reduce recurrence

At this stage, automation should not replace oversight — it should enforce it. Approval logic becomes embedded. Audit trails are automatic. Liability visibility improves in real time.

Expected outcome by day 90:

Reduced manual workload, faster cycle times, lower duplicate payment exposure, and measurable improvement in cost per invoice — without adding headcount.

Why this phased approach works

This roadmap works because it de-risks finance transformation.

Instead of attempting enterprise-level complexity, it delivers enterprise-grade control in structured layers. Each phase improves visibility before increasing speed. Each step strengthens governance before scaling automation.

As AI in finance continues to evolve, many mid-market teams are evaluating financial AI agents, procurement agents, and even Tipalti alternatives to modernize accounts payable — but long-term success still depends on structured workflows and embedded controls, not software alone.

For mid-market finance leaders under pressure to reduce cost, improve accuracy, and close faster, the goal is not dramatic change. It is controlled acceleration.

By sequencing intake discipline, approval clarity, exception management, and automation, accounts payable evolves from a fragile process into an orchestrated system — one that can scale with the business rather than struggle against it.

Why AP breaks — and how to fix it without enterprise complexity

Accounts payable challenges are not signs of underperformance. They are signs of growth pressure.

Mid-market finance leaders don’t need enterprise-level complexity to solve them. They need orchestration — coordinated workflows, embedded controls, and real-time visibility.

When intake, approvals, exceptions, and compliance operate as one system, AP becomes predictable. Risk declines. Close accelerates. Headcount scales intelligently.

Automation then becomes what it should be: not a gamble, but a multiplier.

AP doesn’t need to feel fragile. With structure first and automation second, it becomes one of finance’s strongest control environments — even as the business continues to grow.

If you're looking to strengthen control, improve visibility, and scale accounts payable without adding complexity, book a demo to see how structured workflows and intelligent automation can transform your AP process.