Accounts Payable Challenges: Causes, Risks & Solutions

Accounts payable challenges usually appear as slow invoice processing, approval bottlenecks, high exception volumes, late payments, supplier inquiries, duplicate payments, weak visibility, or recurring backlog. The right solution depends on the root cause. Some problems require better workflow design, others require cleaner purchasing data, stronger controls, integration, automation, or additional processing capacity.

Manual work remains significant even as AP technology expands. SAP Concur’s 2026 AP Automation Trends report found that 77% of organizations still manually enter invoices into accounting systems, while only 7% describe AP as fully automated.

The useful question is therefore not:

“How do we automate AP?”

It is:

Where is the AP process breaking, and what needs to change first?

Accounts Payable Challenges in 2026: Start With the Symptoms

A useful diagnostic separates the visible problem from its likely cause.

Many accounts payable challenges become harder to solve when finance teams react to the symptom without identifying whether the underlying issue sits in process, data, technology, controls, or capacity.

This distinction matters because the same symptom can have different solutions.

For example:

Late payments

could mean:

• AP is processing slowly,
• approvers are holding invoices,
• receiving data is missing,
• or invoices are approved but scheduled incorrectly.

Buying automation without identifying which one is happening may simply automate the wrong part of the process.

The Most Common Accounts Payable Challenges

1. Too Much Manual Invoice Entry

Manual invoice capture remains one of the most persistent accounts payable challenges.

SAP Concur’s 2026 research found that 77% of organizations still manually enter invoices, even though nearly three-quarters plan to automate or further improve AP processes.

What It Looks Like

AP employees spend significant time:

• Opening emails
• Downloading invoices
• Entering supplier data
• Entering invoice numbers
• Coding transactions
• Checking fields

Root Causes

Common causes include:

• Invoices arriving through several channels
• Limited OCR/data capture
• Supplier formats varying significantly
• ERP not connected with invoice intake

What to Fix

Standardize invoice intake first.

Then evaluate automation for:

• Capture
• Classification
• Duplicate detection
• PO matching

Among organizations already using AI in AP, SAP Concur reports that 58% use it for invoice capture/data entry and 49% for matching and approvals.

Metric to Watch

Manual touch rate

or

percentage of invoices requiring manual entry

2. Approval Bottlenecks

An invoice can be captured and validated quickly but still remain unpaid because an approver has not acted.

This is one of the easiest accounts payable challenges to misdiagnose.

Suppose:

AP processing time = 1 day

but

approval wait = 7 days

Adding more AP processors will not fix the eight-day cycle.

Root Causes

• Too many approval layers
• Approvers unclear about responsibility
• Approval thresholds too low
• No escalation rules
• Approvals handled through email

What to Fix

Define:

Owner → approval limit → expected response time → escalation

AP teams should also track approval aging separately from AP processing time.

APQC’s cross-industry benchmark currently reports a median of 4.7 calendar days from invoice receipt until approval and scheduling for payment, based on a sample of 8,686 companies. This is useful context, although organizations should compare like-for-like processes rather than treat 4.7 days as a universal target.

Metric to Watch

Approval aging

3. High Invoice Exception Rates

A standard invoice should move through a standard workflow.

When a large percentage does not, AP becomes an exception-management function.

Among common accounts payable challenges, a high exception rate is especially important because it often points to problems outside AP itself, such as incomplete purchase orders, missing receipts, or inconsistent supplier data.

Common exceptions include:

• Missing PO
• Missing receipt
• Quantity mismatch
• Price mismatch
• Incorrect tax
• Wrong entity
• Duplicate invoice

Root Causes

The important point is that AP may not be causing the problem.

For example:

Missing receipt → Receiving issue

Incorrect PO price → Procurement issue

Wrong supplier invoice → Supplier issue

Incorrect coding → AP issue

What to Fix

Categorize exceptions by root cause instead of simply counting them.

A useful report looks like:

Now Finance knows where process improvement is required.

For matching controls in more detail, see 3-Way Matching in Accounts Payable.

Metric to Watch

Exception rate + exception resolution time

4. Supplier Inquiries Consume AP Capacity

Supplier inquiries often sound simple:

Have you received our invoice?

Has it been approved?

When will we be paid?

But at scale, repeated status requests can consume substantial AP time.

Root Causes

High inquiry volume usually indicates poor visibility somewhere in the cycle.

Possible causes include:

• Supplier cannot confirm invoice receipt
• Approval status is unclear
• Payment date is unavailable
• Internal systems do not provide consistent status

What to Fix

Improve supplier status visibility before adding more people to answer email.

Options can include:

• Centralized invoice channel
• Supplier portal
• Automated acknowledgement
• Payment-status notifications
• Defined inquiry workflow

Metric to Watch

Supplier inquiries per 1,000 invoices

If invoice volume remains stable while inquiry volume falls, visibility is improving.

5. Duplicate, Incorrect and Fraudulent Payments

Payment controls remain one of the highest-risk areas in AP.

Duplicate payments may result from:

• Invoice resubmission
• Different file formats
• Duplicate vendor records
• Manual emergency payments
• Weak invoice-number validation

Fraud introduces another layer of risk.

The FBI identifies Business Email Compromise (BEC) as one of the most financially damaging online crimes and specifically warns about schemes impersonating vendors or requesting altered payment details.

What to Fix

Controls should include:

• Duplicate invoice detection
• Vendor-master governance
• Segregation of duties
• Independent verification of bank-detail changes
• Approval thresholds
• Payment review

A supplier email requesting new bank details should not automatically be treated as sufficient authorization.

For a practical review of these safeguards, see our guide to vendor onboarding and bank-detail change controls, including independent verification, approval evidence, and exception handling.

Metric to Watch

Duplicate-payment rate

plus

vendor bank-change exceptions

6. Fragmented Systems Create Manual Handoffs

Businesses sometimes automate individual steps while leaving the overall workflow disconnected.

For example:

Invoice tool

↓

manual export

↓

ERP

↓

spreadsheet

↓

approval email

↓

payment platform

Each application may work correctly, but Finance still moves information manually.

SAP Concur’s 2026 research points to this problem directly: automation can create additional handoffs and duplicate work when technologies are added without connecting the wider workflow.

What to Fix

Map the actual data flow:

Invoice source → ERP → approval → payment → GL → reporting

Then identify:

• Duplicate entry
• Manual exports
• Missing integrations
• Conflicting master data

Integration should remove unnecessary handoffs rather than simply increase the number of systems.

Metric to Watch

Manual handoffs per invoice

or

straight-through processing rate

7. Poor Visibility Into AP Performance

One of the more strategic accounts payable challenges is not knowing why performance is changing.

A monthly report showing:

8,200 invoices processed

does not answer:

• How many are still waiting?
• Where are they waiting?
• How many contained exceptions?
• How many were paid late?
• Did cost per invoice improve?
• Did quality decline?

What to Fix

Build a balanced AP scorecard.

At minimum, track:

• Invoice cycle time
• Approval aging
• Backlog
• Exception rate
• First-pass accuracy
• On-time payment rate
• Cost per invoice
• Duplicate-payment rate

APQC’s updated 2026 AP benchmarks similarly cover measures including cost per invoice, first-time error-free disbursements, and invoice-to-payment cycle time.

For a complete measurement framework, see Accounts Payable Metrics: How to Measure AP Performance.

Metric to Watch

Not one metric.

Use a balanced scorecard.

8. Invoice Volume Outgrows AP Capacity

Some accounts payable challenges are not technology problems at all.

Consider:

If:

• Workflow is stable
• Exception rate is stable
• Productivity is stable

but backlog keeps rising, available capacity may simply no longer match demand.

What to Fix

Options include:

• Remove unnecessary manual work
• Automate repeatable activity
• Reallocate responsibilities
• Add AP resources
• Use external processing capacity

Do not force technology to solve a pure staffing problem.

Metric to Watch

Backlog + invoices per FTE + incoming volume

Match the Solution to the Root Cause

This is where the article should differ most clearly from the old version.

Automation is one tool, not the universal solution.

For example:

High exception rate caused by missing receiving records

will not necessarily disappear because AP buys a better OCR system.

The correct fix is upstream:

improve receiving discipline.

When AP Automation Helps — and When It Does Not

Automation is most effective when the underlying activity is:

• Repeatable
• Rules-based
• High-volume
• Supported by reliable data

Strong candidates include:

• Invoice capture
• Duplicate detection
• Matching
• Workflow routing
• Reminder notifications
• Reporting

Automation is less effective when the problem is:

• Unclear purchasing policy
• Poor master data
• Missing receiving records
• Undefined approval ownership
• Inconsistent exception decisions

For technology selection, see Accounts Payable Automation Software: 2026 Guide.

A useful rule is:

Standardize first → automate second → optimize third.

Is It a Process Problem or a Capacity Problem?

This distinction can prevent Finance from choosing the wrong solution.

Diagnosing accounts payable challenges this way helps separate workflow defects from staffing constraints and technology gaps before the business invests in a new solution.

Signs of a Process Problem

• High exception rate
• Repeated missing PO/receipt
• Multiple approval loops
• Significant rework
• Duplicate processing
• Different teams following different rules

Response: redesign the process.

Signs of a Capacity Problem

• Process is stable
• Quality remains stable
• Productivity remains stable
• Incoming volume increases
• Backlog consistently grows

Response: increase processing capacity.

Signs of a Technology Problem

• Same information entered repeatedly
• Data cannot move between systems
• Reporting requires manual extraction
• Standard invoices receive unnecessary manual touches

Response: improve integration or automation.

Many organizations will have a combination of all three.

The priority should be determined by which constraint creates the greatest operational impact.

Where External AP Support Can Fit

External AP support is most useful when the business has a clear operating model but needs more execution capacity.

External support can help address accounts payable challenges linked to recurring backlog or transaction growth, but it should not be used to avoid fixing unclear processes, poor controls, or unreliable source data.

A responsibility split could look like:

This allows businesses to reduce transactional workload without transferring final financial control.

Companies evaluating broader AP, AR, GL, reconciliation, and finance operations support can explore Innovature Finance & Accounting Outsourcing Services.

For the operating workflow behind these responsibilities, see What Is the Accounts Payable Process?.

AP Challenge Diagnostic: What Should You Fix First?

Use your current AP data and identify which statement best describes the operation:

Then prioritize improvement in this order:

1. Find the root cause

↓

2. Assign ownership

↓

3. Fix data/process

↓

4. Add controls

↓

5. Automate repeatable work

↓

6. Add capacity if volume still exceeds resources

That sequence is a more useful way to address accounts payable challenges than treating every problem as a software issue.