15 Common Accounts Payable Challenges and How to Solve Them
Blaine Sanderson 
March 2nd, 2026
Accounts payable problems rarely stem from a single issue. Instead, they build over time — manual data entry, slow approvals, limited visibility, payment errors, fraud exposure, siloed systems, and outdated processes all compounding into operational inefficiencies.
For many finance teams, these common accounts payable issues aren’t isolated disruptions — they reflect structural challenges in the accounts payable process. As invoice volumes grow and digital payments expand, managing AP through disconnected workflows or paper-based systems becomes increasingly difficult. Organizations today face a mix of:
- Manual accounts payable problems
- Accounts payable invoice management challenges
- Accounts payable software implementation challenges
- Fraud and security risks
- Payment optimization pressures
The good news? Most accounts payable problems and solutions are not about adding more oversight — they’re about simplifying workflows, embedding controls, and modernizing processes with automation.
This guide explores 15 of the most common challenges in accounts payable and outlines practical, automation-driven strategies to solve them.
” Simply put, automation is the key to an agile and scalable AP operation. As technology advances, finance leadership will further understand the importance of investing in a solution that allows their AP team to go from transactional to strategic. “
Many of the challenges outlined in this article are covered in the May 15, 2025 webinar “Delivering Strategic Value from Accounts Payable” by Ernie Humphrey, CEO of 360 Thought Leadership. We’ve also drawn from MHC webinars presented by such industry experts as Mary Schaeffer, Debra R. Richardson, and Mark Brosseau to leverage a wide range of viewpoints. We’ll include some of their insightful accounts payable tips along the way.
Let’s look at some of the most common issues facing AP teams today, as well as how to find accounts payable methods for both preventing them and addressing problems that do arise.
Table of Contents
- Data Entry Issues
- Slow or Inconsistent Processing
- Approval Lags
- Payment Errors and Duplicate Payments
- Complicated Internal Processes
- Hard-to-Manage Paper Records
- Lack of Visibility into Processes
- Insufficient Encryption and AP Security Controls
- Accounts Payable Fraud
- Invoice Exceptions Causing Delays
- Vendor Inquiries about Payment Status
- Inefficient Payment Methods
- Missing Out on Early Payment Discounts
- Strained Supplier Relationships
- Reluctance to Adopt New Technology
Human error remains one of the most persistent accounts payable problems. Despite advances in automation, many organizations still rely on staff to key invoice data into accounting or ERP systems. According to Mark Brousseau, 66% of AP departments still process their supplier invoices manually, increasing processing time, cost, and error risk.
In addition, Mary Schaeffer tells us that 39% of invoices contain errors when they rely on human input and review rather than embedded controls. When invoice amounts, vendor details, dates, or coding fields are entered by hand, even small errors can result in duplicate payments, reconciliation delays, missed discounts, and audit exposure. In manual environments, these issues often surface only after payment has been issued — requiring time-consuming corrections.
Over time, repeated manual handling becomes a structural risk in the accounts payable process — limiting scalability, reducing visibility, and increasing exception rates.
Key Takeaways
- Manual AP data entry persists: A majority of businesses still key invoice data by hand, exposing operations to costly delays and inaccuracies.
- Errors and inefficiencies are structural: Manual processes often require staff to re-enter or correct data multiple times, slowing overall AP throughput.
- Intelligent automation tackles the root cause: OCR/ICR and AI-driven capture significantly reduce manual typing, reduce error rates, and free AP professionals for higher-value work.
✅Solution: Optical Character Recognition (OCR), Intelligent Character Recognition (ICR) and AI Included in Data Software.
Modern accounts payable automation reduces data entry errors by eliminating manual typing at the source. Intelligent invoice capture technologies — including OCR, ICR, and AI-powered data extraction — automatically read invoice data from PDFs, scanned documents, and digital files, then route it directly into AP workflows and ERP systems.
Advancements in AI are making it simpler than ever for businesses to make use of Optical and Intelligent Character Recognition. ICR is a more advanced form of OCR that uses machine-learning algorithms to speed up processing and translate more complicated formats, such as handwriting and uncommon fonts.
Instead of rekeying information across spreadsheets and email threads, data is captured once and used throughout the approval, matching, coding, and posting process. Machine learning further improves accuracy over time by recognizing vendor formats and reducing repeat corrections.
The result: fewer errors, faster approvals, stronger audit trails, and improved cash flow visibility — without increasing headcount.
” By building an integrated partnership between human intelligence and machine efficiency, you can unlock new levels of success—reducing errors and costs, enhancing customer experiences, enabling innovation, and fostering an engaging culture of continuous improvement in which your employees and organization will thrive. “
Real-World Example
MHC helped Hot Springs Health, a regional healthcare provider in Wyoming, streamline invoice processing by implementing intelligent invoice capture and workflow automation.
By eliminating manual data entry and reducing human intervention, the organization improved processing accuracy, accelerated approvals, and reduced delays caused by paper-based and email-driven processes.
Average invoice cycle times dropped from one week to two or three days — a 50% improvement — while strengthening financial control across accounts payable.
Real-World Example
MHC helped CoxHealth, a large not-for-profit healthcare system in Missouri processing 245,000 invoices annually, modernize its accounts payable operations— implementing document imaging with OCR and intelligent data capture integrated with its Infor Lawson ERP.
Prior to automation, fragmented systems and manual processes limited visibility and created inefficiencies. With automated invoice routing and data capture in place, typical invoice processing time was cut in half, two AP staff were redeployed to more strategic work, and higher invoice volumes were absorbed without increasing headcount.
Processing invoices can be a frustrating and cumbersome task without some facet of an automated system. What’s more, in large accounts payable departments, personnel may be unaware of the comprehensive process, be overwhelmed by the number of invoices or even take liberties with them.
AP employees get relegated to their particular role in processing invoices, and then they don’t know where to turn when questions or inaccuracies arise.
When some element of your process requires modification, the challenge only intensifies. Making changes often requires submitting a ticket to your IT team, then waiting for your ticket to make it to the front of the queue. In the meantime, your AP team is losing valuable time that can delay processing and damage relationships with your suppliers.
Key Takeaways
- Manual AP workflows create unpredictable invoice cycle times.
- Lack of visibility slows approvals and increases supplier risk.
- IT-dependent process changes delay improvements.
- End-to-end automation standardizes routing and improves transparency.
- Automated workflows reduce processing time and scale without adding staff.
When invoice generation, approvals, and payments operate across disconnected systems, processing timelines become unpredictable. Invoices may sit in inboxes, wait on unclear routing chains, or require manual reconciliation before payment. These challenges in the accounts payable process often frustrate vendors and limit cash flow control.
As organizations expand, these inefficiencies compound — creating unpredictable processing timelines, supplier frustration, and unnecessary operational costs.
✅Solution: End-to-End Automation
An ideal automated AP software solution offers out-of-the-box functionality from end to end, with no coding required. A self-service solution that can be easily configured to your team’s specific needs cuts down on time and resources that would otherwise go to making those modifications. It also empowers your AP team by allowing even non-technical employees to make important adjustments they need to keep their workflow running smoothly.
Automating AP processes from end to end streamlines your workflow from invoice capture to routing for approvals to distributing payments. Invoice processing takes place in four general phases before a final payment: invoice receipt, invoice confirmation, invoice recording and invoice approval. Each of these stages comes with their own process streamlining capabilities through a digital repository:
- Invoice receipt:
The repository automatically archives the invoice and notifies the necessary personnel of the received documents through email or messaging. - Invoice confirmation:
Since all invoice history and vendor information is housed within the system, confirmation and invoice review times are cut down dramatically. Double checking numbers and dates are only a few clicks away. Central repositories can even recognize missing or potentially fraudulent invoice information. - Invoice recording:
The repository automatically fills key information into AP records. They recognize, input and organize invoice numbers without the need for tedious manual data entry. Then they save those documents in one accessible place. - Invoice approval:
Digital repositories make invoice auditing and paper trails a breeze. Any incoming invoice can be set up to automatically match a housed purchase order or receipt since these documents are all now stored together. Personnel can quickly and thoroughly review each file, then pass it along to the relevant section manager or department head without undue delay.
Learn more about Touchless Invoice Processing
End-to-end automation connects invoice receipt, validation, approval, and payment into a single structured workflow. Instead of relying on external vendors or siloed tools, organizations gain centralized control over document generation, routing logic, storage, and payment execution.
Modern AP systems support:
- Automated Invoice Capture & Validation – Incoming invoices are digitized, validated, and matched against vendor and purchase order records.
- Configurable Approval Routing – Invoices are automatically routed to the appropriate approvers based on role, department, or dollar thresholds.
- Centralized Invoice Repository – All invoice data, history, and supporting documents are stored in one searchable location for faster review and audit support.
- Integrated Payment Processing – Approved invoices move directly into payment workflows without manual re-entry or reconciliation delays.
By reducing manual handoffs and centralizing visibility, organizations achieve more consistent processing times and improved control over the AP lifecycle.
“No matter where you are on the automation scale, your goal should be to become fully automated. Today’s invoice-to-pay platforms make it easier than ever to automate end-to-end, from invoice receipt all the way through reconciliation and reporting.”
Real-World Example
MHC helped a national healthcare third-party administrator (TPA) with 500+ employees modernize slow, manual AP payment workflows.
By implementing MHC NorthStar AP Payments integrated with its ERP system, the organization automated invoice grouping, ACH file generation, and check processing — supporting 55,000 ACH and 10,000 check payments annually.
The result: faster turnaround times, improved reconciliation accuracy, and scalable payment operations without increasing back-office overhead.
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Approval delays remain one of the biggest challenges in accounts payable. As departments grow and invoice volumes increase, routing chains often become more complex. Without structured workflows, invoices may pass through multiple reviewers via email or shared drives, slowing review cycles and increasing the risk of stalled payments.
APQC benchmarking tells us organizations with automated approval workflows experience faster processing times and fewer exceptions than those relying on manual routing. Yet many teams still struggle with unclear backup approvers, inconsistent escalation paths, and limited visibility into approval status.
These approval bottlenecks can lead to missed early-payment discounts, delayed reporting, and strained vendor relationships.
Key Takeaways
- Manual approval routing slows invoice processing and increases exception risk (APQC).
- Complex, multi-step approval chains create bottlenecks as departments grow.
- Lack of structured backup routing leads to stalled invoices.
- Configurable, rule-based workflows accelerate review cycles.
- Centralized tracking improves accountability and predictability in AP approvals.
✅Solution: Choose Software with Customizable, Automated Workflow Routing
Modern AP automation platforms eliminate approval lags by centralizing routing logic within configurable workflows. Instead of relying on manual handoffs or static approval paths, invoices are automatically directed to the appropriate stakeholders based on predefined rules. Effective solutions include:
- Role-based routing chains with backup approvers
- Threshold-based approval logic tied to invoice amounts
- Centralized tracking dashboards
- Secure digital review environments
By structuring approval paths clearly and automating handoffs, organizations reduce lags and maintain control over review timelines. Look for automated AP software that affords the following invoice approval routing flexibility:
- Custom routing “chains” or “branches” with select personnel – You can organize and create task-relevant groups made up of only the individuals necessary to approve an invoice or order type, including back-up approvers for times when your primary approvers are not available.
- Configurable routing “chains” or “branches” where invoices are organized by payment amount – When invoices under a certain cap are received, you can automatically send them straight to a section manager, then on to finance. Likewise, for larger invoices, you can set up chains with section managers, and department heads get notified. This ensures proper notifications are sent to the appropriate people, wasting no one’s time.
- Email notification and approval – Some systems may even allow in-email reviews and approvals, improving efficiency and reducing approval lags.
Real-World Example
MHC helped a regional U.S. healthcare network with approximately 1,000 employees eliminate approval bottlenecks caused by fragmented systems, manual routing, and unsecured email distribution of AP checks and tax documents.
After implementing MHC NorthStar AP Payments with centralized, cloud-based workflow automation, the organization streamlined routing, accelerated check processing, and reduced manual tasks — deploying the solution in just 2–3 months ahead of tax season.
The result: faster review cycles, stronger security, and reliable performance during peak volumes.
Even well-managed accounts payable departments occasionally encounter payment errors. It reflects poorly on your company, even in cases of small errors or well-intentioned accidents.
As such, AP managers continually strive for ways to reduce payment errors — such as late or double invoice payments — while maintaining simple work order processes and a system that can, in the future, scale up.
Industry benchmarking suggests that duplicate or erroneous payments can account for approximately 0.8%–2% of total disbursements annually — a small percentage that can add up quickly for organizations processing high invoice volumes.
The problem has only intensified in recent years as more business has shifted online.
Key Takeaways
- Manual approval routing slows invoice processing and increases exception risk (APQC).
- Complex, multi-step approval chains create bottlenecks as departments grow.
- Lack of structured backup routing leads to stalled invoices.
- Configurable, rule-based workflows accelerate review cycles.
- Centralized tracking improves accountability and predictability in AP approvals.
As Mary Schaeffer addresses in an MHC webinar, those numbers have also been driven by post-pandemic supply chain disruptions, slowdowns in U.S. Postal services, and an increase in ACH payments. Mitigating a duplicate payment is often a time-consuming and frustrating task for both your organization and your vendor, requiring your business to issue credits and correct records.
✅Solution: Set up Control Account Codes for All Vendors
Rather than adding more manual review steps, organizations can reduce payment errors by embedding controls directly into their AP workflows. Modern payment automation platforms apply validation rules before payments are released, helping prevent duplicate invoices and coding inconsistencies.
Effective payment controls include:
- Vendor-Level Control Codes & Structured Ledger Mapping to standardize invoice classification
- Duplicate Invoice Detection to flag matching invoice numbers before payment
- ERP-Integrated Validation to reduce mismatches and eliminate manual re-entry
- Automated Discount & Credit Application to ensure consistent vendor reconciliation
These built-in safeguards help improve payment accuracy, strengthen audit readiness, and support scalable operations.
Learn more about how to prevent duplicate payments with automation
“When it does happen, you want to go back right away and close the loophole that allowed that duplicate payment to occur. Because it’s one thing to make a mistake. It’s another thing to repeat it.”
Real-World Example
MHC helped CoxHealth, a large not-for-profit healthcare system processing 245,000 invoices annually, enhance payment accuracy within its AP operations.
By implementing ERP-integrated automation with intelligent data capture and centralized payment validation, CoxHealth reduced manual reconciliation, improved oversight across complex workflows, and scaled payment volumes without increasing staff.
Not all accounts payable problems are technical — many are process-driven. When internal workflows are disorganized, spread across multiple systems, or split between paper and digital tools, employees’ productivity drops.
Intricate internal processes are a key business challenge. For accounts payable departments, this can take the form of disorderly paper and digital invoicing methods, overworked or underutilized personnel, invoice systems spread out among different apps, platforms and software and managers too engaged — or too lenient — with order workflows.
Along similar lines, internal silos also hamper collaboration. For accounts payable departments, this often shows up as invoices stored in different applications, unclear ownership of tasks, inconsistent communication between AP and procurement, or approval paths that vary by department.
Key Takeaways
- Complicated internal processes are a common accounts payable challenge.
- Siloed systems slow collaboration and increase administrative costs.
- Centralized, automated workflows simplify invoice management.
- Clear routing and role definition reduce confusion and duplication.
- Going fully digital improves visibility and long-term efficiency.
Taking measures to build a culture of collaboration including integrated systems and centralized controls will go a long way toward tearing down those silos. Recent workforce trends make the need for an uncomplicated processing system all the more evident.
The COVID-19 pandemic and the subsequent “great resignation” have made it imperative for employers to provide systems and work environments that keep employees engaged and empowered. A cumbersome or tedious invoicing process can contribute to high turnover rates amongst employees who grow frustrated at working with a system that makes their jobs more difficult
✅Solution: Simplify Workflows and Centralize Control
- Centralizing Invoice Management – Bringing invoice capture, routing, and storage into one platform eliminates system-hopping and confusion.
- Defining Clear Roles and Routing Logic – Automated workflows assign responsibility clearly and reduce unnecessary handoffs.
- Standardizing Communication Channels – Integrated systems keep AP, procurement, and finance teams aligned within a shared workflow.
- Reducing Paper and Manual Touchpoints – Moving fully digital helps eliminate redundant processes and significantly lowers administrative overhead.
- Connect with key teams: Building a culture of collaboration for your AP team requires open channels for regular conversation with procurement, treasury, and any other teams with a stake in the AP process.
- Standardize communications: Every department involved in a communication needs to be on the same page. Standardizing the platforms, channels, and tone used in your communications reduces the risk of miscommunications and duplicated efforts.
- Train across functions: Build empathy and understanding across different departments by offering cross-functional training. For example, AP employees may get trained in basic procurement functions.
- Go digital: Straddling both paper and electronic invoicing systems creates problems for everyone. You can cut department expenses by up to 90 percent just by going paperless.
- Go automated: A single, automated accounts payable software system has the ability to transform your processes. With everything your department needs located within one application, all tasks are made smoother.
“Siloed communications cause issues for nearly half of AP teams. The good news is when we have the right culture and we have the right technology, we can start to get at the root causes of those silos.”
Real-World Example
MHC helped an Illinois school district reduce administrative costs and simplify fragmented document processes that relied heavily on paper and disconnected systems. By implementing MHC’s document automation solutions, the district centralized invoice and document management, improved routing efficiency, and reduced manual handling across departments. The result: lower administrative overhead, streamlined internal workflows, and better visibility into financial processes — without increasing staff.
Paper-based processes remain one of the more persistent accounts payable challenges. Physical invoices take up space, require manual filing, and slow down retrieval when information is needed quickly. Searching through file cabinets or scattered shared drives adds unnecessary time to already busy AP workflows.
Relying on a paper-based accounting system can also limit an organization’s ability to keep pace with evolving compliance requirements.
The OECD’s ongoing work on digital tax administration and e-invoicing initiatives highlights how governments across Europe and other regions are expanding digital reporting mandates to improve transaction transparency.
Key Takeaways
- Paper-based processes slow invoice retrieval and limit visibility.
- Manual filing increases administrative effort and storage costs.
- Digitizing invoices improves scalability and audit readiness.
- OCR and ICR reduce manual data entry from paper documents.
- Centralized digital repositories streamline AP workflows.
As these requirements evolve, paper-heavy processes become harder to maintain, audit, and scale. Industry benchmarking also shows that manual invoice processing can cost significantly more per compared to automated alternatives. Over time, those costs add up quickly.
As invoice volumes increase, paper-based systems become increasingly difficult to scale, making digital transformation less about convenience and more about operational sustainability.
✅Solution: Go Digital — and Automate Where Possible (If You Can’t, at Least Go OCR or ICR)
Moving away from paper simplifies invoice management, improves record accessibility, and reduces administrative overhead. Research shows that going paperless can reduce the cost of processing an invoice by an impressive 76%. Furthermore, digitizing invoicing has been shown to boost employee efficiency by 53%.
A centralized digital repository allows AP teams to access invoices, approvals, and payment history instantly — without digging through physical files. Modern automated AP systems support:
- Digital Invoice Capture & Archiving
Invoices are scanned or received electronically and stored in a searchable, centralized repository. - OCR and Intelligent Data Extraction
Optical Character Recognition (OCR) and Intelligent Character Recognition (ICR) automatically extract invoice data and input it into AP systems, reducing manual entry. - Structured Workflow Routing
Digitized documents move through configurable approval paths without physical handoffs. - Secure Record Retention
Electronic storage improves audit readiness and simplifies compliance documentation.
Even organizations not ready for full automation can begin by digitizing invoices and implementing OCR to reduce manual data entry and paper handling. The result: faster retrieval, improved visibility, and lower long-term administrative costs.
“77% of all AP departments have deployed some sort of automated technology. However, 66% of AP departments still manually handle most of the invoices they receive from suppliers. The problem is that they’ve taken a piecemeal, hodgepodge approach and haven’t looked at AP processes from end to end.”
Real-World Example
MHC helped a large public-sector organization modernize paper-heavy workflows across accounts payable and other departments by digitizing document management and centralizing record access. By implementing automated document capture, electronic storage, and structured routing workflows, the organization reduced reliance on physical files, improved accessibility of financial records, and streamlined internal processes. The result: faster document retrieval, improved transparency, and more efficient cross-department collaboration — all while lowering administrative overhead.
A lack of visibility is one of the more frustrating accounts payable challenges. Errors — from matching exceptions to misrouted invoices — are inevitable in any process. What matters is how quickly teams can identify and resolve them.
In manual or disconnected AP systems, tracking invoice status often means searching through emails, shared drives, or multiple applications.
When something goes wrong, AP teams may need to retrace steps, confirm approvals manually, or restart routing entirely. This slows resolution and increases the risk of late payments or overlooked liabilities.
Limited visibility also affects communication. AP specialists, managers, CFOs, procurement teams, and suppliers all need different information to do their jobs effectively.
Key Takeaways
- Limited visibility slows issue resolution and increases payment risk.
- Disconnected systems make invoice tracking more difficult.
- Role-based dashboards improve collaboration and accountability.
- Real-time monitoring helps identify bottlenecks early.
- Centralized data improves transparency for both internal teams and suppliers.
When stakeholders lack access to timely, role-specific data, collaboration suffers and decisions are delayed. Over time, limited process visibility can contribute to late payments, duplicate payments, and missed opportunities to improve workflow efficiency.
✅Solution: Real-Time Dashboards and Process Transparency
An automated AP solution provides centralized, real-time visibility into invoice status, approvals, payments, and exceptions. Instead of chasing documents, teams can view progress at a glance and respond quickly when issues arise.
Effective visibility tools include:
- Role-Based Dashboards – Customized views ensure AP specialists, managers, and finance leaders see the information most relevant to their responsibilities.
- End-to-End Invoice Tracking – Teams can monitor invoices from receipt through payment, reducing stalled workflows.
- Exception Alerts & Workflow Monitoring – Automated notifications highlight bottlenecks before they impact payment timelines.
- Supplier-Facing Transparency – Shared access to status updates reduces inquiry volume and improves vendor relationships.
As AP expert Ernie Humphrey notes the importance of real-time dashboards that can be easily tailored to meet the needs of specific roles.
“I see companies delivering the same dashboards and the same reports to each and every person. Look at what information impacts the performance of your AP specialist, your AP manager, your controller, your CFO, your treasury colleagues, and procurement. Getting people the information that they need at the right time is an absolute game changer.”
Real-time dashboards also ensure that all stakeholders, both internal and external, have access to the same data. AP automation consolidates all pertinent data into a single place that’s accessible to suppliers, AP teams, and anyone else who needs it. That data symmetry prevents costly miscommunications and duplicated efforts. The result: faster issue resolution, better decision-making, and stronger control over the accounts payable process.
Real-World Example
MHC helped a regional U.S. healthcare network modernize fragmented AP and year-end workflows that relied on multiple tools and email-based processes.
By implementing cloud-based automation with centralized dashboards and secure self-service access, the organization gained real-time visibility into document status and payment activity.
The result: improved process tracking, stronger transparency, and more reliable performance during high-volume periods.
Security is no longer a side issue in accounts payable — it’s a core operational concern. Recent industry research reports that nearly half of companies (47%) experienced fake invoice scams in the past year — highlighting how common social-engineering fraud has become in AP environments.
As AP processes become more digital and interconnected, sensitive financial and vendor data must be protected across systems, users, and payment channels.
Smaller teams may find it especially challenging to keep up with evolving security standards.
Limited resources, outdated systems, or inconsistent access controls can increase exposure to fraud, unauthorized transactions, or data breaches.
Key Takeaways
- AP systems must balance automation with strong security controls.
- Digital payments increase the need for encryption and role-based access.
- Built-in transaction monitoring reduces fraud and duplicate payment risk.
- Clear segregation of duties strengthens internal controls.
- Secure AP automation supports both efficiency and compliance.
At the same time, growing use of ACH payments and digital workflows means more financial activity is moving electronically — raising the importance of strong encryption and role-based controls.
Cybersecurity threats continue to evolve, and AP data remains an attractive target because it touches vendor banking details, tax information, and payment records. Without structured safeguards, organizations risk operational disruption, compliance issues, and reputational harm.
✅Solution: Strengthen Controls with Secure AP Automation
Improving accounts payable security doesn’t require building a separate security department — it requires embedding safeguards directly into AP workflows and software systems. Improving AP security and preventing fraud starts with embedding safeguards directly into financial workflows and automation platforms.
Effective security controls include:
- Role-Based Access Controls – Limit system access based on clearly defined responsibilities.
- Segregation of Duties – Ensure no single user controls the full payment lifecycle.
- Encrypted Data Storage and Transmission – Protect vendor and banking data both at rest and in transit.
- Transaction Monitoring and Alerts – Flag unusual activity, duplicate invoices, or payment anomalies.
- Comprehensive Audit Trails – Track who accessed, modified, or approved financial documents.
When security features are integrated directly into AP automation systems, organizations can reduce fraud risk while maintaining operational efficiency. The result: stronger financial controls, improved compliance readiness, and greater confidence in digital payment environments.
“We need to make sure that our payments are secure. We need to be looking at our payment risk exposures. Investing in AP automation absolutely mitigates payment risk exposures, which are going up.”
“Prioritizing security in every interaction not only protects sensitive information but fosters a sense of reliability and confidence, forming the cornerstone of enduring customer relationships.”
Real-World Example
MHC helped a regional healthcare network address data security concerns tied to email-based distribution of sensitive tax documents.
Payroll had been merging PDFs locally and emailing them to employees, creating PII exposure risks.
By implementing secure, role-based portal delivery with encrypted workflows, the organization eliminated unsecured email attachments and strengthened document protection while maintaining high-volume processing performance.
Fraud remains one of the most persistent accounts payable problems organizations face. In a 2025 survey we learn that 79% of organizations experienced attempted or actual payments fraud, underscoring how widespread payment-related risk has become.
As AP teams manage vendor onboarding, invoice approvals, and payment releases, they sit at the center of financial transaction activity — making them a frequent target.
Fraud schemes continue to evolve, ranging from business email compromise and vendor impersonation to duplicate invoices and payment redirection.
As digital payments and ACH transactions increase, criminals are using more sophisticated social-engineering tactics to bypass traditional controls.
Key Takeaways
- AP departments are frequent targets of payment and invoice fraud.
- Digital payment growth increases fraud sophistication.
- Segregation of duties and vendor verification are foundational safeguards.
- Automated anomaly detection strengthens fraud prevention.
- Combining human oversight with automation provides the strongest protection.
Fraud doesn’t just create financial loss — it disrupts workflows, damages vendor relationships, and consumes valuable time spent investigating and recovering funds.
✅Solution: Layered Fraud Controls and Automated Monitoring
Preventing accounts payable fraud requires a combination of clear internal controls and embedded automation safeguards. Effective fraud prevention strategies include:
- Segregation of Duties
Separate invoice approval, vendor setup, and payment release responsibilities. - Vendor Verification Procedures
Confirm banking changes and new vendor requests through independent channels. - Automated Duplicate and Anomaly Detection
Use software to flag duplicate invoices, unusual payment patterns, or abnormal transaction amounts. - Transaction Monitoring and Alerts
Real-time alerts highlight suspicious activity before payments are finalized. - Comprehensive Audit Trails
Maintain clear documentation of approvals, edits, and access history. - Regular Fraud Awareness Training
Equip employees to recognize phishing attempts and social-engineering tactics.
When fraud controls are embedded directly into AP automation systems, organizations reduce exposure while maintaining operational efficiency. The result: stronger financial oversight, faster fraud detection, and more resilient accounts payable operations.
“Fraud is one of the biggest concerns we hear about. Businesses know there are all kinds of threats out there, but they don’t always know what can be done to prevent them. Avoiding and preventing fraud is a key day-to-day challenge for most organizations. The peace of mind our customers get when they entrust more of their fraud prevention efforts to the MHC NorthStar system is one of our biggest points of pride.”
Blaine Sanderson, Sr. Product Manager for P2P solutions at MHC
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Invoice exceptions may represent a small percentage of total invoices, but they can create outsized disruption. Even a modest exception rate can slow processing times, increase manual review, and introduce approval delays.
Exceptions typically occur when invoice data does not match purchase orders or receipts, when vendor information is incomplete, or when unexpected charges appear. Each exception requires investigation, clarification, and often additional routing — pulling AP staff away from routine processing and extending payment timelines.
As invoice volumes increase, unmanaged exceptions can quickly become one of the more frustrating accounts payable challenges.
Key Takeaways
- Invoice exceptions can create meaningful processing delays.
- Manual review of mismatched invoices increases rework.
- Automated matching and tolerance rules reduce exception volume.
- Intelligent routing speeds resolution.
- Early detection improves payment timelines and AP efficiency.
✅Solution: Automated Exception Detection and Smart Routing
Modern AP automation systems identify and flag exceptions automatically, so workflows keep moving without manual guesswork. Key capabilities include:
- Automated Matching Rules – Validate invoice data against purchase orders and receipts before approval.
- Pre-Configured Tolerance Thresholds – Flag discrepancies only when they exceed defined limits.
- Targeted Notifications – Route exceptions directly to the right stakeholder for resolution.
- Centralized Exception Dashboards – Provide clear visibility into outstanding issues and resolution timelines.
By catching discrepancies early and routing them intelligently, automation reduces delays and minimizes rework. The result: faster approvals, fewer bottlenecks, and smoother AP operations.
Real-World Example
MHC helped Hot Springs Health, a healthcare organization managing complex invoice workflows, reduce manual intervention and improve exception handling within its accounts payable process.
By implementing automated invoice capture and workflow-driven validation, the organization reduced data-entry errors, minimized delays tied to mismatched or incomplete invoices, and streamlined approvals.
The result: improved accuracy, faster resolution, and more efficient AP operations.
Vendor inquiries are a normal part of accounts payable operations — but when they become frequent, they signal a visibility issue. Suppliers depend on predictable payment timelines, and when they don’t have clear insight into invoice status, they reach out for updates.
If your AP process relies on manual tracking, paper records, or disconnected systems, providing quick and accurate answers can be difficult. Staff may need to search through emails, check multiple systems, or manually confirm payment details before responding. That slows down your team and creates frustration on both sides.
Repeated payment inquiries don’t just consume time — they can strain supplier relationships and reduce confidence in your processes.
Key Takeaways
- Frequent vendor inquiries often signal limited payment visibility.
- Manual tracking slows response times and strains supplier relationships.
- Self-service portals reduce inquiry volume.
- Real-time payment tracking improves transparency.
- Clear remittance information strengthens vendor trust.
✅Solution: Automated Exception Detection and Smart Routing
Modern AP automation reduces vendor inquiries by giving suppliers secure access to the information they need. Effective solutions include:
- Self-Service Vendor Portals
Suppliers can check invoice status and payment history without contacting AP. - Real-Time Status Tracking
Invoices are visible at every stage, from receipt to payment. - Automated Remittance Delivery
Clear remittance details are distributed securely and consistently. - Centralized Communication Records
All payment activity and updates are stored in one accessible location.
When vendors have transparency into payment schedules and remittance details, inquiry volume drops and trust improves. The result: fewer interruptions for AP teams and stronger supplier relationships.
“The preferred way to be paid for a lot of suppliers is checks. Part of the reason is because of their remittance information. So if we’re able to get our suppliers that remittance information automatically, all of a sudden they’re going to say, ‘OK, I don’t want the checks, I don’t want the lockbox.”
“Our purpose at MHC is to make people’s work lives simpler. We remain committed to delivering automation solutions that increase operational efficiency while elevating experiences for the people getting work done at their organizations each day. It is exciting to partner with a growing number of customers ready to tackle the next stage of their digital transformation.”
Blaine Sanderson, Sr. Product Manager for P2P solutions at MHC
Real-World Example
MHC helped a large healthcare organization modernize its billing and payment communications by implementing automated document generation, centralized payment processing, and secure self-service access. Previously reliant on manual processes and limited visibility, the organization faced frequent payment inquiries and communication delays.
With improved data access and real-time tracking, both internal teams and external stakeholders gained clearer insight into invoice status and remittance details — reducing inquiries and improving overall communication efficiency.
As Ernie Humphrey mentions, a surprising number of businesses in the U.S. still prefer to make transactions via physical checks. Outdated payment methods can quietly undermine accounts payable performance.
While checks are still used in many organizations, they introduce slower processing times, higher administrative costs, and additional reconciliation work.
Manual check runs, mailing delays, and fragmented payment schedules can make it difficult to maintain predictable timing.
After all, when suppliers don’t have clarity around how and when payments will be issued, confidence declines and inquiry volume increases.
Key Takeaways
- Manual check processes slow payments and increase costs.
- Electronic payments improve speed, visibility, and security.
- Virtual cards can unlock rebate revenue opportunities.
- Integrated payment scheduling strengthens treasury coordination.
- Payment modernization turns AP into a strategic contributor.
Beyond efficiency, traditional payment methods may also mean missed financial opportunities. Many electronic payment programs — particularly virtual cards — offer rebate incentives that can generate meaningful revenue. Organizations relying heavily on manual checks or disconnected payment processes may be leaving those rebate benefits untapped.
✅Solution: Modernize Payments with Automation and Electronic Options
“Only 9% of all AP departments today are fully automated, where invoices flow into the organization, are processed touch-free, and posted directly to an ERP. On the other end, about 5% of organizations are completely manual and paper-based. That means most of us are somewhere in between.”
Electronic payment methods such as ACH and virtual cards help accelerate disbursement cycles, eliminate mailing delays, and create clearer digital audit trails. They also strengthen payment security through controlled, traceable transactions and can unlock rebate revenue opportunities on eligible payments — turning routine disbursements into a potential financial advantage.
Key modernization strategies include:
- Automated ACH and Virtual Card Payments
Reduce manual handling while capturing rebate incentives. - Integrated Payment Scheduling
Coordinate AP and treasury timing through centralized workflows. - Rebate Optimization Programs
Maximize return on eligible electronic payments. - Real-Time Payment Visibility
Provide tracking from approval through settlement.
By aligning payment methods with automation and rebate programs, organizations improve cash management while turning AP into a strategic value driver.
The result: faster payments, stronger vendor relationships, and new revenue opportunities.
Watch how customers are generating savings through automated payment rebates ⬇️
Real-World Example
MHC helped Hot Springs Health modernize its accounts payable process by implementing automated invoice capture and integrated payment workflows.
By reducing manual handling and improving payment processing efficiency, the organization accelerated disbursement timelines, minimized delays, and strengthened financial oversight.
The result: smoother payment operations and a more scalable, automated AP environment positioned to support modern payment strategies.
Dig Deeper: Follow-up Resources
Explore how organizations can capture rebate value through electronic payments while improving efficiency and control.
Many businesses offer discounts on invoices that are paid before their due dates. These early payment discounts can create meaningful savings — but only if invoices move through the approval process quickly enough.
When routing is manual or data is siloed across systems, invoices often sit in queues, waiting for review. By the time approvals are complete, the discount window may have already closed. Even small delays can make it difficult to consistently capture early-pay incentives. Over time, missed discounts quietly erode cost-saving opportunities and limit working capital flexibility.
For organizations processing high invoice volumes, improving cycle time isn’t just about speed — it’s about financial optimization.
Key Takeaways
- Manual routing can cause missed early-payment discounts.
- Faster approval cycles increase discount capture rates.
- Real-time visibility improves timing decisions.
- Integrated scheduling supports working capital optimization.
- Automation turns speed into measurable savings.
✅Solution: Accelerate Approvals and Optimize Payment Timing
Automation helps organizations capture early payment discounts by compressing approval cycles and improving visibility into payment terms. Key capabilities include:
- Automated Approval Routing
Invoices are routed instantly to the correct approvers based on predefined rules. - Real-Time Invoice Tracking
Teams can see where invoices stand and intervene before discount windows expire. - Integrated Payment Scheduling
AP and treasury can align cash flow strategy with discount opportunities. - Analytics for Discount Optimization
Identify patterns and prioritize invoices that deliver the greatest savings.
By reducing approval bottlenecks and improving timing visibility, automation increases the likelihood of capturing available discounts.
The result: improved cash flow management, measurable cost savings, and faster invoice cycle times.
Real-World Example
MHC helped a regional healthcare network modernize its AP workflows and year-end processing through centralized automation and real-time tracking.
By eliminating manual routing and improving visibility into invoice status and approvals, the organization reduced cycle times and increased processing speed — positioning the AP team to act more quickly on time-sensitive payment opportunities.
Supplier relationships are closely tied to the performance of your accounts payable process. When invoices are delayed, duplicate payments occur, or communication is inconsistent, trust can erode quickly.
Data silos, limited visibility, and manual workflows often contribute to these frustrations. Suppliers may receive mixed messages about payment timing, struggle to access remittance details, or experience delays resolving discrepancies. Over time, these issues can strain relationships and reduce a supplier’s confidence in your organization.
Strong vendor relationships depend on predictability, transparency, and consistent communication.
Key Takeaways
- AP performance directly impacts supplier trust.
- Data silos and manual processes strain vendor relationships.
- Self-service portals improve transparency.
- Automated remittance notifications reduce disputes.
- Clear communication strengthens long-term partnerships.
✅Solution: Improve Transparency and Communication Through Automation
Automated AP systems strengthen supplier relationships by improving visibility and standardizing communication. Effective approaches include:
- Centralized Invoice and Payment Tracking
Ensure both internal teams and suppliers have consistent, accurate information. - Secure Self-Service Portals
Give suppliers access to invoice status and remittance details without repeated inquiries. - Automated Remittance Notifications
Deliver clear, timely payment confirmations. - Integrated Communication Records
Maintain a single source of truth for invoice and payment history.
By replacing fragmented processes with transparent workflows, organizations reduce friction and build stronger supplier partnerships.
The result: improved trust, fewer disputes, and more predictable payment relationships.
Real-World Example
MHC helped a large healthcare organization modernize its billing and payment communications through centralized automation and secure self-service access.
By improving visibility into invoice status and remittance information, the organization reduced confusion, streamlined vendor communication, and strengthened payment transparency across its network.
The result: clearer communication, fewer payment-related issues, and stronger supplier relationships.
Even when automation solves common accounts payable problems, adoption can still be a hurdle. As AI and advanced AP automation become more common, some employees worry about how these tools will impact their roles.
Concerns about job disruption, learning curves, and workflow changes are understandable. Without clear communication and proper training, even well-planned technology initiatives can face internal resistance. Successful modernization depends not just on tools — but on people.
Technology doesn’t replace strong AP teams. It enables them.
Key Takeaways
- Technology resistance can slow AP modernization.
- Clear communication reduces uncertainty around automation.
- Training and upskilling build confidence.
- Employee involvement improves adoption.
- Automation enhances — not replaces — skilled AP professionals.
✅Solution: Position Automation as Enablement, Not Replacement
Overcoming resistance starts with reframing automation as a performance enhancer. Effective strategies include:
- Communicating the “Why”
Clarify that automation reduces repetitive work and frees teams for higher-value analysis and decision-making. - Providing Hands-On Training
Give employees structured opportunities to build confidence using new systems. - Introducing Change in Phases
Roll out new tools gradually to reduce disruption. - Involving Teams in Process Design
When AP staff help shape new workflows, adoption improves significantly.
When employees see automation as a support system rather than a threat, engagement increases and long-term transformation becomes sustainable.
The result: smoother implementation, stronger morale, and more resilient AP operations.
Real-World Example
MHC helped an Illinois school district transition from paper-heavy, manual processes to centralized digital automation across finance and administrative departments. By simplifying workflows and improving access to information, staff were able to shift focus from repetitive handling to higher-value tasks. The result: increased efficiency, reduced administrative burden, and stronger adoption of modernized processes across the organization.
Dig Deeper: Follow-up Resources
Adopting new technology requires both strategy and mindset. This article explores how organizations can integrate automation responsibly while empowering employees.
MHC: Your Partner in Solving Accounts Payable Challenges
Accounts payable challenges are rarely isolated incidents — they evolve as invoice volumes grow, payment methods change, and compliance expectations increase. As this guide highlights, the biggest challenges in accounts payable often stem from manual workflows, limited visibility, siloed systems, and outdated processes.
Modernizing AP isn’t about adding complexity. It’s about embedding intelligent automation that improves accuracy, strengthens controls, accelerates processing, and scales with your organization.
Ready to address your accounts payable challenges? MHC helps finance teams simplify and modernize accounts payable through intelligent capture, workflow automation, integrated payments, and secure delivery — empowering AP teams to operate more efficiently and strategically.
Explore our resources or contact us to schedule a demonstration with one of our AP automation experts.
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Blaine Sanderson
Blaine K. Sanderson is Senior Product Manager for Procure-to-Pay solutions at MHC, where he leads product strategy and innovation for accounts payable automation. With more than two decades of experience in enterprise content management, workflow automation, and ERP integration, Blaine has deep expertise in helping organizations modernize financial operations across SaaS and on-premises environments. Before joining MHC, he held product management and architecture roles at Bottomline Technologies and 5280 Solutions, shaping AP automation offerings used by leading enterprises.