5 Tips to Make Your A/P Sparkle

Jeremy Springer
5 days ago
4 min read

Here’s a pragmatic playbook for tightening your accounts payable (AP) operations—designed for finance leaders who want stronger controls, cleaner processes, and fewer surprises. The emphasis is on proven internal-control mechanics, not flashy tech.

1) Start at the Source: Lock Down Vendor Onboarding & the Vendor Master

Most AP errors and fraud risks originate in the vendor record. Build a vendor due-diligence checklist (legal name, tax ID, address, phone verified independently, banking proof from the institution or secure portal—not via email), and restrict who can add or edit vendors. Require supporting documentation for every change, keep an audit trail, and run a periodic “master file scrub” to remove duplicates and dormant or suspicious entries. Annual cross-checks between vendor and employee masters (to catch shared addresses or bank accounts) are a simple but powerful control. Industry guidance stresses supplier validation and periodic vendor/employee master matching as core safeguards.

Tight vendor hygiene also defends against business email compromise (BEC) and vendor impersonation—attackers’ go-to tactics for diverting payments. Payment networks and risk groups flag BEC, account takeover, and vendor spoofing as active threats; assume requests to change remit details are hostile until proven otherwise, and call back using a verified phone number before any change is saved.

2) Make Purchase-to-Pay Rules Non-Negotiable

If you buy it, you should have a purchase order (PO). If you received it, there should be a receiving record. If you’re paying it, the invoice should match both. That’s the essence of the three-way match—a bedrock AP control. Don’t trade it away for “speed.” Establish clear tolerance thresholds (price/quantity/extended amounts) and route exceptions to approvers outside AP. Public-sector audit guidance and private-sector references alike describe three-way matching—PO, receiving, invoice—as the standard for validating obligation to pay.

Approval matrices should be role-based and dollar-tiered, with evidence captured in the system (not via email attachments). Combine that with duplicate-invoice checks (by vendor, number, date, and amount) and you’ll eliminate a large share of erroneous or duplicate payments—before disbursement.

3) Treat Payment Methods as Risk Categories & Deploy Bank Tools

Not all disbursements carry the same risk. Checks remain the most fraud-prone instrument; if you must use them, enroll in Positive Pay with payee match so the bank rejects anything that doesn’t align with your issued-check file. For ACH, implement debit blocks/filters, require dual approval on new payees and account changes, and use out-of-band callbacks before releasing first-time payments. Recent guidance and survey data underline the need to check vulnerability and the value of Positive Pay as a frontline defense.

Account takeover isn’t a bank-rail problem—it’s a credential problem. Keep online banking access on a least-privilege basis, require multi-factor authentication, avoid public Wi-Fi, and split duties so that no single user can create and release payments end-to-end. Payment organizations recommend dual control and formal security plans for precisely this reason.

4) Engineer Segregation of Duties Around COSO, Not Convenience

A solid control environment starts with structure: separate who (a) creates or changes vendors, (b) enters invoices, (c) approves invoices, (d) sets up payments, and (e) releases payments. Where headcount is limited, compensate with detective controls—daily exception reports, independent bank reconciliation review, and management sign-off on changes to approval roles. The COSO Internal Control Framework’s components (control environment, risk assessment, control activities, information & communication, and monitoring) remain the blueprint for designing and evaluating these safeguards. Build your AP controls so they map cleanly to COSO—auditors and regulators will expect it.

5) Monitor Continuously with Simple, Decision-Ready Metrics

You don’t need exotic analytics to spot trouble. Track and investigate:

Exception rate (invoices bypassing PO/receipt match)
First-time payment rate and value (new vendors, new bank instructions)
Duplicate-invoice hits and write-offs
Early-pay discount capture and average approval cycle time
Stale credit memos and unapplied cash

Couple those with a formal whistleblower/tip line and rotating management reviews. Occupational fraud research shows that organizations consistently lose meaningful revenue to internal fraud, and that detection often comes from tips or simple oversight—proof that basic monitoring works.

Implementation Checklist: What “Good” Looks Like in 60 Days

Vendor master: locked behind role-based access; callback verification on any banking change; quarterly master-file scrub with vendor/employee cross-match.
P2P controls: mandatory POs, three-way match with documented tolerances; automated duplicate-invoice detection; approval matrix enforced in system.
Payments: Positive Pay (with payee match) for checks; ACH debit blocks/filters; dual approval for first-time payments and vendor edits.
SOD & oversight: explicit separation of vendor setup, invoice entry/approval, and payment release; daily exception reporting; independent bank-rec review; quarterly control self-assessments tied to COSO components.
Monitoring & culture: tip line promoted to staff and suppliers; KPIs reviewed monthly with documented follow-ups; refresher training on BEC/account-takeover red flags.

Bonus Tip: Reconcile Vendor Statements — Don’t Just Reconcile the Bank

Monthly vendor statement reconciliations catch issues your bank rec won’t: missing credits, short-ships, duplicate billing, and stray open POs. Prioritize your top-spend suppliers and those with high exception rates. The exercise tightens working capital, reduces noise in AP aging, and gives you early warning when a vendor’s data quality is slipping—often the canary in the coal mine for larger control problems.

The Bottom Line

World-class AP isn’t about adding gadgets; it’s about disciplined vendor hygiene, uncompromised three-way matching, bank-grade disbursement controls, clear segregation of duties, and relentless monitoring. If you implement those five pillars—and work the bonus reconciliation habit—you’ll cut risk, speed cycle times, and extract real value from payables without over-engineering the process.

Legal Disclaimer: This post contains general information and should not be relied upon as the only source of authority. Professional advice should be sought for more specific information related to your exact business and processes. This information was current at time of posting; we are not responsible for updating this or any blog post/article for subsequent changes in the law or its interpretation.