Payment mistakes happen. But they can be fixed.

Payment errors can happen for various reasons. The number gets transposed on a check, or a virtual card is issued but never charged. Sometimes, an ACH payment hits a closed bank account. These kinds of things happen all the time, but even if your error rate is in the single digits when you’re making tens of thousands of payments a year, that’s still a lot of errors.

Most accounts payable departments don’t have the luxury of devoting a team solely to resolving payment errors.

The payment error process is completely reactive—something that someone has to drop everything to do, while also completing their other work. But there are ways to turn reactive procedures into productive ones.

Payment errors take up an inordinate amount of AP (and AR) time—about 20-30 minutes total per error, by our estimate. This is time spent that adds absolutely no value. In fact, it’s a drain on the bottom line. Most accounting departments only have the resources to do the work, not optimize the process. But adding scale can make even small process improvements worthwhile.

Since many companies are often dealing with the same accounting issues, you can get responses to each scenario down to a science.

Some of the most common payment issues are: funds bounce due to suppliers updating or closing their accounts; customers discover clerical errors in the pay file they submitted; or physical checks get lost in the mail.

When it comes to fraud, a lot of the work involves analyzing ACH update requests because they are the most common payments to be targeted by cybercriminals.

Many schemes are directed at tricking people into replacing legitimate supplier bank account numbers with fraudulent ones. According to our data, suppliers change their bank account information about every four years, which means accounts payable departments get a lot of update requests.

In the case of canceled payments, it's important to ensure they were canceled correctly, and determine whether a refund was initiated for any undercharged amounts. This process identifies potential issues effectively without causing a time strain on any party involved.

Nobody likes making errors or admitting they make them, but they are a fact of life when you’re sending payments. There are just too many moving parts for everything to go exactly right all the time. Accounts payable teams devote an enormous amount of time to resolving errors and they spend very little time figuring out how to optimize it. Typically theses are resource-constrained departments. It can be difficult to invest time and effort improving something that no one really wants to admit happens.