Killer costs of manual accounts payable: CFOs say it’s time to act now

Accounts payable isn't flashy, but inefficient AP is silently bleeding money from your business every day. Many finance teams accept slow approvals as normal, but manual processes quietly drain time, money and performance.

In our new report, Stop the AP Leak, Duplicate Payments, Slow Approvals and What Top CFOs Do Next, we spoke to several Australian-based finance leaders across industries to uncover just how costly manual AP can be; their insights were accurate and even a little alarming. In this first excerpt article, we share some of their insights to reveal how outdated workflows create risks that extend far beyond processing delays, think fraud, lost trust, and missed opportunities.

According to the Australian Taxation Office,a paper invoice can cost three times more to process than an electronic one ($27–$30 vs <$10). Yet, shockingly, many finance teams continue to rely on clunky email approvals, spreadsheet tracking and manual data entry.

Manual or paper-based AP processes expose organisations to real and growing risks. The hidden costs include slow, labour-intensive processing where invoices take weeks to approve, frequent errors and duplicates from manual data entry, limited visibility into payables and cash flow, missed early payment discounts, and compliance and fraud risks from messy audit trails. Every extra day an invoice sits unapproved is a day cash flow and credibility takes a hit

These costs aren't just monetary, they also squander potential. As Lou Krstevski, CFO of Sydney-based financial services firm BAC Consulting & Advisory, points out.

"The cost of outdated manual AP systems and processes go far beyond staff time. They also prevent an organisation from reallocating skills to more value-added tasks. Other costs include the damage to corporate goodwill and professional image when there is constant leakage through duplicates, errors, unchecked bank records," he says.

In other words, manual AP doesn't just waste time, it steals opportunities from your team and tarnishes your company's reputation with every error.

Such issues damage relationships with suppliers, financial lenders, auditors, the tax office and regulators. This loss of trust is compounded by growing cybersecurity and invoice fraud risks. According to the Australian Cyber Security Centre's latest Annual Cyber Threat Report, BEC scams cost Australian organisations nearly $84 million in the 2023-24 financial year.

In high-stakes industries such as construction, AP delays can literally stop work. Maximilian Zielinski, CFO of Factor Corp, shares just how risky manual AP can be.

"Errors or delays can hold up projects, create disputes, or strain supplier trust. In an industry where cash flow is everything, these inefficiencies carry real financial weight," he says.

When a project stalls due to a payment issue, it's not just an inconvenience, it's lost revenue and broken trust that can take months to rebuild.

Downstream Effects and Data Accuracy

Manual invoice processing is not only slow 'in the moment', it triggers a cascade of downstream errors that can cost even more to fix. Retief Lampen, Chief Financial Officer at iion, explains that tiny typos or inconsistencies (like an extra space or a wrongly keyed vendor ID) can snowball into missing entries and duplicate payments.

Morgan Wilson, Founder and Director of Brisbane-based firm Creditte, calls the detective work of fixing mismatches a ruinous use of resources.

"Teams spend hours matching invoices to POs and receipts, often in spreadsheets. Every handoff is a chance for an error to creep in, and fixing mistakes takes twice as long as preventing them," he says.

Many of these issues stem from inaccurate invoice data. Staggeringly, of the 1.2 billion invoices exchanged in Australia each year, 1 in 5 is sent to the wrong person and nearly 1 in 3 contains incorrect information, according to the Australian Small Business and Family Enterprise Ombudsman.

Emma Fisher of Sydney-based Evolve Consultancy underscores that bad invoice data undermines everything.

"If invoice data isn't accurate, the financials built on top of it can't be trusted," she says.

In short, bad data = bad decisions. If invoices aren't checked properly, budgets and forecasts become fantastical.

Rising Supplier Expectations

Supplier patience is wearing thin. In just the last couple of years, 'acceptable' payment terms have shrunk dramatically. Two years ago, suppliers tolerated monthly payment batches.  Today they want real-time updates on payment status and instant confirmation.

These expectations create particular pressure in industries like construction, where payment delays quickly cascade down the supply chain. Suppliers and subcontractors need faster payment cycles and clearer communication about when they'll receive funds. If these standards are not met, expect suppliers to escalate by aggressively chasing payments, withholding deliveries or even terminating contracts.

For organisations still relying on manual AP processes, meeting these demands becomes increasingly difficult. But the upside of streamlining approvals is substantial.

As Lou Krstevski observes, speeding up approvals doesn't just keep suppliers happy, it actually strengthens your bargaining power.

"The ability to accurately reduce approval times and payment will give you the leverage to renegotiate better supplier terms," he says.

"Accurate reporting of approvals and payables will increase confidence in cashflow forecasting, and the team can focus on more value-add tasks or be moved to special projects that add value."

When you pay faster and error-free, you gain leverage to demand early-payment discounts or better terms. Real-time, accurate AP data means no more guessing in cashflow forecasting, leadership can trust the numbers and make decisions faster.

The question isn't whether your manual AP process will fail, it's when. The real cost goes well beyond processing inefficiencies. It damages relationships, exposes organisations to fraud, undermines financial reporting and prevents finance teams from contributing strategically.

By sticking with the status quo, you're not just tolerating a slow process, you're risking your cash, your credibility, and your company's future. Every day you wait is another day of lost money and lost opportunity. It's time to act.

This article is just a preview of the findings in our new report, Stop the AP Leak. Download the full report to see what top CFOs are doing next to fix AP and how you can follow their lead.