A slow, error-prone accounts payable process doesn’t just frustrate your team—it costs your business real money and lots of time. From duplicate invoices to missed payment terms, inefficiencies in AP silently chip away at margins. But here’s the good news: a focused Accounts Payable Audit can help you stop the leaks and regain control.
This blog breaks down what an AP audit is, what it reveals, and why now is the time to prioritize it—especially if you’re a CFO, CEO, or head of finance looking to protect profitability and optimize cash flow for your business.
Why Accounts Payable Goes Wrong — Even in “Well-Run” Teams
Most finance leaders believe they’ve got their AP process under control. After all, invoices get paid, vendors don’t complain too loudly, and the books are closed on time. But that surface-level confidence often masks costly problems.
Common AP issues that go unnoticed:
- Duplicate payments due to manual data entry errors
- Missed early-payment discounts from long approval cycles
- Unclaimed credits from vendors left on the table
- Late fees triggered by delayed processing
- Poor visibility across decentralized teams and tools
According to Ardent Partners, the average company loses $11 per invoice due to processing inefficiencies. Multiply that by thousands of invoices a year, and it’s easy to see how the hidden costs add up.
What Is an Accounts Payable Audit?
An Accounts Payable Audit is a structured review of your AP transactions, systems, and processes. It’s designed to uncover errors, inefficiencies, and compliance gaps that impact your financial performance.
But this isn’t just a checklist review. A modern AP audit provides actionable insight into:
- Where money is being lost
- What processes are broken
- Which controls are missing
- How automation or policy changes can help
Done right, the audit isn’t punitive—it’s proactive. It helps finance leaders course-correct, recover lost funds, and future-proof operations.
When Should You Conduct an AP Audit?
If any of the following sound familiar, it’s time to audit your AP function:
- You’ve grown fast, merged entities, or onboarded new systems
- You suspect some invoices are being paid more than once
- Your DPO (Days Payable Outstanding) has risen without explanation
- Vendor disputes are becoming frequent
- You lack end-to-end visibility on where payments get stuck
An audit isn’t about assigning blame. It’s about gaining clarity—so you can shift from reactive firefighting to strategic financial planning.
What an AP Audit Actually Reveals
Let’s get specific. A comprehensive accounts payable audit typically surfaces four key types of issues:
1. Duplicate or Incorrect Payments
Audits often uncover multiple payments made on the same invoice, especially in organizations with manual data entry or multiple approvers.
Example: A large retailer found 3.4% of its vendor payments had been duplicated due to entry errors across two systems. That added up to over $240,000 in overpayments in one quarter.
2. Unclaimed Vendor Credits
Credits from returns, rebates, or overpayments can go unrecorded if your system doesn’t flag them properly.
3. Process Bottlenecks
Delays between invoice receipt and payment approval create inefficiencies and lost opportunities for early-payment discounts. Audits pinpoint where those delays occur—often at handoffs between departments.
4. Policy Non-Compliance
Inconsistencies in approval workflows, threshold policies, or documentation standards are red flags for fraud risk and poor audit-readiness.
Real Business Benefits of an AP Audit
You’re not just checking for errors. You’re unlocking strategic value. Here’s what finance leaders often gain from a thorough audit:
1. Immediate Cost Recovery
Identifying and recovering duplicate payments, overpayments, and missed credits can lead to 5–15% in cost savings, depending on your invoice volume.
2. Cleaner Vendor Relationships
Vendors appreciate accurate, timely payments. An audit reveals the causes of payment delays or disputes—improving trust and strengthening long-term partnerships.
3. Process Optimization
By highlighting inefficiencies, audits allow teams to streamline workflows, reduce approvals, and define clear SLAs (Service Level Agreements).
4. Better Controls and Compliance
Audits assess your risk exposure and help standardize internal controls. That’s essential for regulatory compliance and fraud prevention.
5. Data for Smarter Automation
Once you know your gaps, you can confidently move forward with AP automation that fits your real needs—not assumptions.
What Does the Audit Process Look Like?
The scope of an AP audit depends on your goals, but a typical approach includes:
Step 1: Data Collection
Pull payment history, invoice logs, vendor master data, and approval workflows from your systems. Ensure consistency in data formats.
Step 2: Error Identification
Use analytics to detect anomalies: duplicate invoice numbers, same vendor + same amount combinations, and payments without matching POs.
Step 3: Process Mapping
Track each stage from invoice receipt to payment, highlighting handoffs, delays, and exceptions.
Step 4: Control Assessment
Evaluate whether current approval paths, thresholds, and documentation standards are being followed—and if they’re sufficient.
Step 5: Recommendations & Remediation
The audit concludes with a report outlining recoverable payments, systemic risks, and actionable process improvements.
Who Should Lead the Audit?
For credibility and accuracy, the audit should be led by either:
- An internal team with cross-functional involvement (AP, finance, IT), or
- An external audit partner with expertise in AP systems and compliance
In either case, leadership buy-in is crucial. When CFOs or CEOs sponsor the initiative, it signals strategic importance—and accelerates follow-through.
Turning Insights into Action
An audit without action is just a report. Make sure to:
- Recover overpayments or apply unused credits
- Update vendor data to reduce duplication
- Implement approval workflows with clear roles and logic
- Introduce automation for invoice matching and PO validation
- Define SLAs and monitor them with dashboards
Don’t treat the audit as a one-time event. Consider making it part of your annual finance calendar, just like tax or statutory audits.
Why Now?
With inflation, rising costs, and tighter budgets, every dollar saved in AP goes straight to your bottom line. In many organizations, it’s one of the fastest paths to cost recovery—without layoffs or cuts.
Also, if you’re preparing for automation or digital transformation, auditing your current process is a smart first step. You’ll avoid hardcoding broken workflows into expensive new platforms.
Conclusion: Stop the Bleed, Strengthen the Flow
If your accounts payable system is hiding errors, you’re not alone. But inaction can be costly. An accounts payable audit helps you uncover financial leaks, recover cash, and build a more resilient finance operation.
It’s not just about fixing the past—it’s about enabling better decisions, smarter spend, and stronger cash control moving forward.
Want to uncover savings hiding in your AP process?
Let Serina.ai help you run a quick audit and show you what’s really happening under the hood. It’s fast, non-invasive, and ROI-positive from day one.
