Does your accounts payable department lose money without your knowledge? What if we told you that 39% of invoices have errors? These errors could be costing you millions of dollars. Every day, businesses lose thousands of dollars to avoidable mistakes in their accounts payable systems. The troubling reality? Most issues in accounts payable go undetected until it is too late.
In 2025, 68% of companies still manually enter invoices into their systems, when the risk is highest. Accounts payable errors can hurt your cash flow, vendor relationships, and overall financial health, whether you are a small business or a large company.
Let's find out the seven most damaging mistakes that could be occurring within your accounts payable department right now.
1. Duplicate Payments: The Silent Profit Killer
Among common AP errors, duplicate payments are the most costly. Across all industries, organizations make duplicate payments at rates of 0.8% to 2% of their total costs. Although that sounds small, consider this: a company with a 5 percent return on sales would have to generate an additional $100,000 in sales to replace the profit lost from a duplicate payment of $5,000.
Why does this happen? One of the most common factors is manual data entry. An employee can repeatedly enter the same invoice, leading to multiple payments. If a vendor invoice is delayed, vendors can resubmit it, and without tracking systems, both versions are processed. Small- to medium-sized companies lose up to $12,000 per month in overpayments due to duplicate invoice issues.
2. Manual Data Entry Mistakes
Currently, 86% of small and medium-sized businesses have employees manually entering invoice data. This is a significant source of inefficiency for a company and an increased risk of errors. Mistakes are bound to happen when your employees are entering multiple invoice IDs, amounts, and vendor details every day.
Organizations that manually process invoices can expect an error rate of 1% to 4% per invoice. Consider the ease of incorrectly transposing two numbers in a long invoice number or misreading an invoice from a similar vendor. These relatively common AP errors compounded when teams were under intense deadline pressure.
3. Lost Discounts Offered by Suppliers and Penalties for Late Payment
A manually processed invoice can take 14.6 days, which is more than enough time to incur a late payment penalty. 49% of the invoice processors surveyed in the world closed more than five invoices each month in a cycle during which payment was delayed.
Numerous organizations incur an opportunity cost of 2% to 3% when invoices are not paid on time. The amount to lose is significant, given the many invoices processed over time and the lost early-payment discounts of 3% to 4%. Late payment charges further increase the amount lost and negatively impact employers' relationships with their suppliers.
4. Fraudulent Invoices and Payment Scams
In 2024, 22% of finance professionals stated that AI-generated scams targeted their businesses, and over the past few years, B2B payment fraud has affected 65% of companies of all sizes. Fraudulent invoices are more sophisticated, and scams utilize AI to create highly believable fake invoices.
Fraudulent invoices can contain fake vendors, altered details, or duplicates created with the intent to steal. External fraudsters submit invoices with slightly modified text to make duplicate payments, and internal employees might collude with outside parties to create fake invoices.
5. Missing or Incorrect Invoice Coding
Inaccurate coding in the general ledger will cause havoc with your financial reports. If invoices are coded to the wrong expense accounts, your budgeting reports will become less valuable, and you will be unable to track spending accurately by department or project.
Lack of reliable information exacerbates this frequent AP mistake. Budget holders lack confidence in their reports, and executives do not appreciate how funds are being consumed. As time goes on, this problem becomes larger, and unspeakable year-end reconciliations await.
6. Poor Vendor Master Data Management
When invoice numbers, values, and dates feature inconsistently within the same logic, few systems respond to flagged suspicious patterns. Duplicate vendor records, stale data, and inconsistent naming schemes within a vendor database are fertile ground for naive AP errors.
For example, consider the entries "ABC Company," "ABC Co.," and "ABC Company LLC" as separate vendor records for the same supplier. Uncoordinated entries can lead to duplicate disbursements, discounts being ignored, and poor reconciliations. Overlaps can complicate the monitoring of a vendor and their spending. That makes it almost impossible to drive the negotiations to your organization's favor.
7. Absence of Three-Way Matching Controls
The purpose of a three-way match is to compare purchase agreements, receiving reports, and invoices to confirm that payment is made for ordered goods and services that have actually been supplied. Due to broken processes and a lack of automation, up to 66% of invoices contain errors.
The absence of this control means — and this is a typical case of ap errors —that firms lose thousands of dollars in overcharges that go undetected, paying for items that were not ordered, at the wrong prices, and for items that were not received.
Ready to Eliminate Such Costly AP Errors Forever?
At Discover Dollar, we help organizations eliminate the accounts payable mistakes that cost them millions. Our accounts payable audit services identify and address hidden inefficiencies, duplicate payments, and gaping process gaps that other reviews have not. We supply the answers to your problems as we recognize them.
Once more, we will help you eliminate costly accounts payable mistakes. We offer a no-cost accounts payable assessment to value the work you continue to lose. See www.discoverdollar.com for more information or to book your session over the phone. Your accounts payable processes will improve as a result. FAQs on our site will help you find answers.