The 5 most expensive mistakes in your accounts payable

In recovery audits covering many billions of euros of spend, we see the same five mistakes again and again. Not because finance teams work badly, but because these mistakes by definition happen outside the view of regular controls. Here are the five, ranked by what they cost organisations in practice, with the warning sign for each.

1. Duplicate payments caused by duplicate master data

The most expensive mistake is a combination: a supplier exists under two vendor numbers and the same invoice is processed through both. The standard duplicate check works per vendor number and therefore sees nothing. Warning sign: suppliers with almost identical names or the same IBAN under different numbers.

2. Surcharges and indexations that stick

A temporary surcharge (fuel, energy, COVID) is agreed and never removed, or an indexation is applied earlier or higher than the contract allows. Small per invoice, substantial over years and volume. Warning sign: a rising average price per unit at constant volumes, or surcharge lines that stay on the invoice even in falling markets.

3. Credit notes and balances that never come back

Promised credit notes that are never sent, booked credit notes that are never offset and prepayments that remain after a contract ends. This item is invisible in your own records and can only be found by reconciling balances with the supplier. Warning sign: no periodic statement of account process with your largest suppliers.

4. Bank account changes without verification

The mistake with the greatest damage potential per case: a bank account change is processed on the basis of an email, without verification through a known contact channel. If it goes wrong, the money is often gone for good. Warning sign: changes to the master file can be made by one person, without a four-eyes principle and without a callback to a verified phone number.

5. VAT on autopilot

VAT coding based on the vendor rather than the supply, reverse-charge VAT that is paid anyway and foreign VAT that is not reclaimed. Warning sign: booked VAT rates have never been systematically tested against the expected regime per supply.

What these five have in common

All five are invisible in a balancing ledger and all five can be found algorithmically in the payment history. A periodic review of three to five years of payment data recovers the mistakes made while they have not yet expired, and the accompanying process report prevents the next ones. On a no cure, no pay basis, the financial risk of such a review is also zero.