Top 15 AP Challenges for 2025 — And How to Fix Them

Although an approval process is typically implemented to improve control, language-based policies backed by manual routing often lead to confusion around who needs to approve what. And, of course, it’s all further complicated when an approver is away from work. As a result, AP has to field a lot of questions regarding approvals and track down missing evidence.

Slow approval processes aren’t just frustrating, they can also impact business operations. When approvals are slow or even missing, payments can be delayed, resulting in poor vendor relationships. Employees can experience delays in getting their work done while they wait for approval. Or, they can make a purchase only to find out it isn’t reimbursable.

With a guided central intake for all spend requested, Airbase ensures that all spending goes through the appropriate channels for review and approval, reducing the risk of out-of-policy purchases. By including vital documents like contracts or security certificates in the initial spend request, stakeholders have the information they need to review the request.

Moreover, with spend analytics that actually track approval times, you can identify bottlenecks and smooth out points of friction, whether that is with the process or a chronically late individual.

When an employee makes a purchase, the terms must be clearly communicated to the AP team. But often that information gets lost because the communication avenues aren’t set in place, so an invoice arrives in the accounting department’s inbox with no context, few details, and no indication of who to ask for clarification.

An automated audit trail ensures that all related correspondence is kept with the transaction record for easy reference — no more mysteries to untangle!

Miscategorizing an expense is easy to do, particularly in companies with complex general ledgers. When a miscategorized expense is caught before the monthly close, it can be corrected manually, which could potentially slow the process down. But when it’s not caught until after the close, budgeting could be affected. If material enough, a miscategorization could require a restatement, which is time-consuming and requires additional reporting and explanations, and also undermines confidence in the team and their ability to close the books correctly.

The most sophisticated platforms use AI and machine learning to automatically categorize purchases for review based on historical patterns and user input, so it gets smarter with every transaction.

AP doesn’t happen in a vacuum. Often transactions need to be vetted by other teams: a software purchase might need to be reviewed by the infosec team, or the legal team might need to see the terms of a contract.

But that review can easily fall between the cracks in siloed systems. And then the AP team must track down the required documents, typically resulting in a mishmash of emails and Slack messages.

Airbase integrates with the business systems other stakeholders use. That means the infosec team doesn’t have to leave Jira to review SOC compliance, for example.

Receipts are required by the IRS as proof of purchase and it’s necessary to produce them during an audit. But they’re also notoriously easy to misplace, or even forget to ask for. It falls on AP to track them down and to ensure the amounts on each receipt reconcile with credit card statements and reimbursement requests.

Plus, all other documentation must be attached to a transaction record, including spend approvals. Sometimes those approvals are buried in an email chain, sometimes they are just verbal agreements, but, once again, it falls on AP to ensure the approval record is easily accessible and matches the transaction amount.

AP also needs to secure W-9s in order to track any payments to vendors that must be reported to the IRS through required 1099 reporting.

Airbase ensures receipt compliance by requiring employees to upload receipts for every purchase, which are then automatically matched to transactions for verification. Vendors can easily submit W-9s through a self-service vendor portal.

Everything, of course, needs to get into the GL. With a siloed AP tech stack, team members have to perform manual data entry or messy CSV transfers in order to update the GL to close the books.

With an automatic GL sync, financial data seamlessly moves between the platform and your general ledger for real-time financial reporting.

When each vendor accepts different payment types — card, check, ACH, vendor credits, or wire transfers — AP has to move from one system to another just to pay vendors.

Airbase offers multiple payment options, including ACH, virtual cards, and wire transfers, allowing businesses to choose the most efficient method for their transactions.

The visibility and control afforded by purchase orders ease some AP pain points. But without the right processes in place, POs can be one of the most time-consuming AP functions. Consider this all-too typical day:

• An invoice comes in but there doesn’t seem to be a matching purchase order.
• An overdue notice arrives but the team can’t find the original invoice.
• An invoice for a pricey SaaS product arrives. The team matches the purchase order but it’s unclear who approved such an expensive purchase.
• An invoice arrives and the team matches the purchase order and processes the payment — but the goods haven’t been received yet.

Automated 3-way matching eliminates those frustrations by reconciling purchase orders, invoices, and receipts, for improved accuracy and less manual effort.

Everyone hates doing their expenses and accounting teams often find that processing them is difficult. One survey found that over half of surveyed business travelers would rather do their taxes than fill out an expense reimbursement form. The entire process is rife with problems for AP to solve.

A high percentage of reimbursement requests contain errors, which can slow down the reimbursement process. As a result, according to PYMNTs, about 40% of employees who use their own money for business have had cash flow problems because of this, which can lead to unnecessary tension with AP.

Airbase simplifies expense management with a touchless reimbursement process. AI-powered automation takes care of approvals, receipt capture, and categorization reducing the likelihood of errors in reimbursement requests. Employees are reimbursed quickly and accurately, with the reimbursement going straight to their bank account, alleviating cash flow issues and reducing frustration for both employees and the AP team.

Corporate cards are an easy payment method for employees but they can add a lot of extra work for AP. When a physical card is passed around among employees, it can become impossible to track. (We’ve talked to controllers who simply took away all corporate cards to try to rein this in.) Plus, cards can get lost or stolen, resulting in extra work canceling the cards and updating any recurring charges on the missing card. Recurring charges associated with specific employees must be canceled when employees leave.

Credit card spending must also be reconciled for each card — a time-consuming manual process when multiple cards are used.

Airbase solves these problems with software-enabled virtual cards for real-time visibility into all card transactions. Automated approvals, reconciliation, and GL sync eliminate manual data work. You can set individual spending limits, timeframes, and categories on cards, ensuring that each transaction aligns with company policies.

With virtual cards assigned to specific employees or vendors, organizations can easily manage recurring payments and immediately cancel cards when employees leave or when a card is lost, streamlining both security and budget compliance.

An audit can be a productive review of policies and procedures, but without the right processes in place, it can be extremely time-consuming to gather all of the required documentation.

Airbase provides comprehensive audit trails that track every transaction, approval, and modification, ensuring full transparency and simplifying compliance and audit processes. It can also produce a month-end reconciliation report to identify unreconciled items and possible reasons for the difference.

Amortizations and accruals must be properly booked, but complex schedules are time-consuming, particularly when done manually on spreadsheets.

Timely, accurate payments not only make vendors happy, they can also lead to lower costs through rewards like early payment discounts. A variety of factors that slow down payments are outside of AP’s control: sometimes the vendor hasn’t updated their payment procedures, sometimes employees are slow to submit requests, and sometimes slow approval procedures create delays.

Airbase simplifies vendor management with a centralized platform to onboard, track, and pay vendors with ease. This ensures timely payments, reduces administrative work, and maintains accurate records for all vendor transactions.

Leadership, budget owners, and department heads all need up-to-date data to monitor a company’s financial status and make budgetary adjustments as needed. But, when financials aren’t updated in real time, the AP team has to produce ad hoc reports, often with little notice.

Airbase solves these problems by providing real-time spend analytics that give stakeholders immediate visibility into financial data. This eliminates the need for ad hoc reports, since financials are always up to date, allowing for timely budget adjustments and more informed decision-making.