By Lyle Malander, CEO & Founder | Malander Advisory
Published: March 20, 2026

 

EXECUTIVE SUMMARY: Weak accounts payable (AP) and accounts receivable (AR) controls are a leading but often overlooked source of financial risk. From late payments and poor visibility to weak governance and manual processes, these gaps can significantly impact cash flow, increase fraud exposure and drive unnecessary costs.

This article highlights the most common control failures seen across multinational organisations and outlines how finance leaders can strengthen working capital management and financial governance.

 

Why AP and AR Controls Matter More Than Ever for Cash Flow and Risk Management

In an environment of rising capital costs, tighter liquidity and increased regulatory scrutiny, AP and AR have become central to working capital optimisation. Accounts receivable directly impacts cash flow, while accounts payable influences supplier relationships, cost control and fraud exposure.

However, global payment behaviour remains unpredictable. Recent research shows that over 50% of B2B invoices globally are paid late, creating significant cash flow pressure across supply chains.

Similarly, studies indicate that 86% of businesses report up to 30% of their monthly invoices are overdue, locking up working capital that could otherwise fund growth.
In the UK alone, late payments are estimated to cost the economy around £11 billion per year, while thousands of businesses fail annually due to cash flow disruptions linked to delayed payments.

For CFOs, these numbers highlight a simple truth: Weak receivables management is not just an accounting issue, it is a risk.

 

The Control Gaps We See Most Often

Across multinational corporates, the most common AP and AR weaknesses rarely appear dramatic. Instead, they emerge through operational inefficiencies, legacy systems, or poorly enforced governance frameworks. But they share one common feature: they quietly erode financial performance over time.

 

1. Weak Segregation of Duties

One of the most frequent AP control failures occurs when the same individual can:

• create vendors
• approve invoices
• authorise payments

 

Without adequate segregation of duties, organisations increase the risk of ghost vendors, invoice manipulation or unauthorised payments. In large enterprises with high payment volumes, this risk multiplies quickly. Strong financial governance requires that no single individual controls the entire payment process.

 

2. Poor Vendor Master Data Controls

Vendor master files are often overlooked as a control risk.

However, weak oversight of vendor data creates multiple vulnerabilities:

• duplicate vendors
• unauthorised bank account changes
• fraudulent payment redirection

 

AP departments manage large volumes of transactions and supplier relationships, making them a prime target for fraud attempts and control failures. Without ongoing monitoring of vendor data changes, companies expose themselves to both internal and external threats.

 

3. Lack of Visibility Over Payment Processes

Many finance teams still operate with fragmented systems, manual approvals and siloed data. This creates gaps such as:

• missed invoices
• duplicate payments
• delayed approvals
• lost early payment discounts.

 

A lack of real-time visibility across AP workflows makes it difficult to identify these issues before they become costly errors. Over time, this erodes financial control and increases audit risk.

 

4. Ineffective Credit and Collection Controls

On the receivables side, the most expensive gaps are often tied to weak credit policies and inconsistent collections processes. Many companies then land up extending credit without adequate risk assessment, only to discover months later that invoices remain unpaid.

Late payment behaviour creates a domino effect across supply chains. Research suggests that supplier cash flow problems account for around 20% of delayed payments, creating cascading payment delays across businesses.

For CFOs, this translates into:

• rising debtor days
• increased bad debt exposure
• unnecessary borrowing costs

 

5. Overreliance on Manual Processes

Manual invoice processing remains common across many organisations, particularly in businesses operating across multiple jurisdictions. Manual processes increase the likelihood of:

• data entry errors
• duplicate payments
• delayed collections
• fraud risks.

 

At the same time, they limit the ability of finance teams to produce real-time insights into working capital performance. Many companies are recognising that automation and stronger control frameworks are essential to modern financial governance.

 

The Real Cost of Control Failures

The true cost of AP and AR weaknesses is not immediately visible. It often appears indirectly through:

• delayed cash conversion cycles
• increased borrowing costs
• vendor disputes
• audit findings
• regulatory exposure.

 

In extreme cases, weak controls allow fraudulent activity to continue for extended periods. Studies show that fraud schemes often remain undetected for around 12 months before discovery, allowing losses to accumulate significantly. By the time the issue surfaces, remediation is far more expensive than prevention.

 

A Multinational Perspective on AP and AR Controls

While control gaps appear similar globally, regulatory expectations and operational complexities differ significantly across jurisdictions. For organisations operating across South Africa, the United Kingdom and the United States, finance leaders must navigate:

• different compliance environments
• varying payment cultures
• multiple banking systems
• cross-border supplier relationships.

 

Multinationals require consistent governance standards combined with local regulatory expertise.

 

Strengthening Controls Before Problems Escalate

The most effective AP and AR control environments share a few common characteristics:

• Clear governance frameworks
• Strong data controls
• Automation where appropriate
• Proactive working capital management

 

For C-level Executives, these measures are not simply operational improvements. They form part of a broader strategy to protect liquidity, reduce financial risk and strengthen governance.

 

Why are AP and AR Controls a Leadership Issue?

When finance leaders treat working capital discipline as a strategic priority, businesses typically see:

• improved cash flow stability
• lower fraud exposure
• stronger supplier relationships
• more predictable financial performance

 

In contrast, when these areas are viewed purely as back-office processes, control gaps often persist unnoticed.

 

The Role of Specialist Advisory

Identifying and addressing AP and AR control weaknesses requires both technical expertise and an independent perspective. Advisory firms with multinational experience can help organisations:

• assess control effectiveness
• identify leakage and fraud risks
• strengthen governance frameworks
• improve working capital performance

 

At Malander Advisory, we work with corporates across South Africa, the UK and the United States, helping finance leaders strengthen their financial control environments and protect enterprise value. Because in today’s environment, working capital discipline and strong financial governance are no longer optional, they are competitive advantages.

 

 

About the Author

Lyle Malander is the CEO and Founder of Malander Advisory, a leading professional services and advisory firm headquartered in Johannesburg with an expanding footprint across the UK and Europe. He is passionate about financial strategy, governance, and leadership that drives sustainable business growth in a changing world.