The High Cost of AP Mistakes: Why Errors Cost More Than Money & How to Reduce Them

When it comes to Accounts Payable (AP), even small mistakes can send ripple effects across your organization, affecting stability. While errors impact the bottom line, they also erode trust, strain vendor relationships, and weaken team morale. 

A 2024 study by Ardent Partners found that 14% of invoices became exceptions due to missing information, errors, or approval bottlenecks, leading to costly delays.  

And fraud remains a growing threat: according to the Association for Financial Professionals, 79% of organizations were “victims of attempted or actual payment fraud activity in 2024,” with 63% of attacks targeting checks.  

The financial fallout from errors, delays, and fraud can reach into the hundreds of thousands, sometimes far more, depending on the size of the organization. 

But the damage doesn’t stop with lost dollars. Over time, repeated mistakes or missteps can chip away at your company’s reputation, make vendors hesitant to do business with you, and leave your AP staff discouraged and overburdened.  

Those hidden costs of lost trust, morale, and credibility can be even more difficult to recover than the financial loss itself. In an ecosystem filled with risk, even small mistakes can have serious consequences.

The Ripple Effects of Errors in AP 

How do errors slip through, even for the most careful AP professionals? Often, it’s the weight of manual tasks like data entry, chasing approvals, and cross-checking details.  

Imagine you’re onboarding a new international vendor, and your busy AP clerk forgets to check the latest Office of Foreign Asset Control (OFAC) lists. Maybe they planned to do it later, but manually checking sanctions lists takes time, and this week, it didn’t happen. Unfortunately, you only found out the vendor was recently added to the OFAC list after sending payment. Now you may be liable for a significant financial penalty in the hundreds of thousands of dollars or more. In addition, the AP clerk responsible may feel guilt or shame over their misstep. 

Or perhaps a new AP clerk forgets to verify the legitimacy of a vendor address change, and you send thousands of dollars to the wrong place, resulting in a frustrated vendor and financial loss to your organization. This puts strain on your supply chain, vendor relationships, and team. 

Accounts Payable Mistakes Cost More Than You Think 

The tangible dollars lost to errors or fraud are only part of the equation. What are the true, long-term costs of AP mistakes?  

• Trust that’s hard to win back: When vendors lose confidence in your ability to pay accurately and on time, you risk strained relationships, disrupted supply chains, or less favorable terms. 

• Team strain that lingers: Errors increase stress for AP staff, and repeated setbacks can erode morale. Over time, this drives turnover and slows down hiring and training, leaving your department understaffed when accuracy is most critical.  

• Credibility on the line: Compliance violations or repeated payment issues chip away at your reputation in the market. Once credibility is damaged, it’s far more difficult to restore than lost dollars.  

• Growth left on the table: Every hour your team spends reprocessing invoices or repairing vendor relationships is time not spent on strategic initiatives, analytics, or capturing early payment discounts. The opportunity cost compounds over time. 

These long-term effects make AP mistakes more than just “one-and-done.” Left unaddressed, broken processes repeat, and the cumulative damage undermines your credibility, resilience, and ability to grow. These costs can easily be averted with some simple process shifts. 

Why Mistakes Happen (and How to Mitigate Them) 

The good news is, by understanding why and when mistakes happen, you can build systems that protect organizational well-being, maintain trust, and strengthen partnerships. 

Most AP mistakes and vulnerabilities are often a result of: 

When these factors combine, even the most skilled professionals can slip up. The key is not to expect perfection from people, but to design processes and systems that reduce errors, protect against fraud, and give your team the structure they need to succeed.  

How to Mitigate Vulnerabilities & Turn Errors into Opportunities 

Mistakes and vulnerabilities often reveal where change is needed most. When you understand where and when most issues happen, you can focus on making improvements in your process or incorporating tools that will help reduce risk.  

Start by assessing when and where in your process issues occur most often. For example: 

If most of your team’s oversights are related to manual work, volume of work, or tedious repetitive tasks, it’s likely time to consider AP automation and payment tools like Mekorma Payment Hub. A strong automation tool will help significantly reduce your time to pay and support your team by streamlining approvals, vendor management and validation, payment archives and audit-readiness.  

If you experience a high incidence of fraud attacks related to checks, moving away from paper checks may benefit your organization. Consider switching to or incorporating cloud payments.  

Fraud is an external risk that every organization faces, and AP teams are on the front line of defense. Strong internal controls—such as segregation of duties, approval thresholds, and clear approval workflows—help protect your organization’s cash. With the right structures and tools in place, your team can reduce exposure to fraud and demonstrate due diligence to auditors.  

Stronger and clearer systems may also increase employee morale by supporting greater confidence in your payment process. Automation tools (like Mekorma Payment Hub) can also help with reducing fraud success by automating thresholds and approval processes, and enhancing your vendor validation efforts. 
 
Turning errors and vulnerabilities into opportunities requires an honest look at your processes and systems. This isn’t about pointing fingers, it’s about learning, making positive changes and moving forward stronger. Ultimately, it’s about supporting greater organizational health and resilience. 

Building Resilient Risk-Reduced AP teams 

At the end of the day, some mistakes in Accounts Payable are inevitable. People are human, and no process will ever be 100% perfect. But mistakes don’t have to define AP.  

It’s the same with risk. AP is inherently risky. But with strong controls, the right tools, and supportive systems in place, you can greatly reduce the number of errors and vulnerabilities, minimizing their impact.  

That’s how AP shifts from being a source of risk to becoming a foundation of trust, resilience, and long-term success.