Are you losing money currently without even realizing it? Are thousands—and possibly millions—of dollars slipping away unnoticed in your accounts payable cycle? For retail CFOs overseeing complicated vendor relations and large volumes of transactions, these are not theoretical questions. They are timely realities that require action.
In 2025, the retail environment is more challenging than ever. One retail chain found it had paid suppliers $300,000 too much through redundant invoices, demonstrating the ease with which payment mistakes build up. With margins narrowing and economic volatility on the horizon, retail CFOs can afford no errors in AP recoveries.
Getting Undercover About AP Mistakes
Routine accounts payable audits identify typical mistakes in procurement and accounts payable procedures, which could cost as much as 5% to 10% of profit. That's money lost, folks, when you look at the volume of retail operations. The catch? A lot of these losses occur stealthily, hidden in thousands of transactions each day.
Payment mistakes aren't solely about giving away money today. They also stress vendor relationships and introduce unwanted tension with partners who fuel your competitive edge. When you learn you've been overpaying a supplier for several months, it erodes trust and makes future negotiations more challenging.
Red Flag 1: Duplicate Payments Running Wild
The most prevalent accounts payable problem is duplicate payments. This is when the same invoice is paid twice, usually due to system errors, clerical mistakes, or a breakdown in interdepartmental communication.
Once a new e-invoicing solution was put in place, duplicate payments increased as suppliers were learning the new system. This is particularly prevalent during system changes or when your staff is shorthanded. Advanced accounts payable solutions can intercept these duplicates before they exit the building, but too many retailers are still using manual methods that overlook these mistakes.
Red Flag 2: Missed Early Payment Discounts
Are you leaving money on the table? Lots of vendors provide discounts if you pay bills early—most commonly 2% discount for payment in 10 days. Such discounts accumulate rapidly for hundreds or thousands of bills.
An SME retailer found that it had forfeited early payment discounts totaling $100,000. That's cold, hard profit that could have been realized with improved payment timing and procedures. The issue is usually in back-end invoice processing, poor visibility into cash flows, or a lack of systems for handling discount-eligible invoices as a priority.
Red Flag 3: Unclaimed Credits and Vendor Statement Mismatches
Vendor credits are the most underutilized area in accounts payable. These credits may be for returned merchandise, price corrections, rebates, or advertising allowances. If your staff is not reconciling vendor statements regularly, these credits remain idle as you continue to pay full price on subsequent orders.
The retail sector is most exposed to this problem due to the intricacy of vendor relationships. You may have secured special terms, bulk pricing, or seasonal deals that grant credits. Without precise monitoring, these advantages never get recorded in your bottom line.
Red Flag 4: Pricing Errors and Contract Non-Compliance
You took hours to negotiate reasonable prices with your suppliers. But are you really getting them? Pricing mistakes occur more frequently than you realize. A supplier may charge you the incorrect rate, omit applying a negotiated discount, or enter a wrong digit.
AP Recovery Audits recover $1M per $1B in spend with suppliers, which means they are a high-yield investment. A significant portion of this recovery is due to capturing price discrepancies and contract non-compliance. If vendors fail to meet terms as agreed, you're essentially overpaying for goods and services.
Red Flag 5: Freight and Shipping Overcharges
Transportation and logistics expenses are significant line items for retailers. Sadly, freight billing is notoriously inaccurate. Carriers may charge the wrong rates, include unauthorized accessorial fees, or charge for non-delivered services.
Freight invoices are not analyzed as rigorously as product invoices by many retail CFOs. This lack of vigilance opens up opportunities for expensive errors to fall through. You may be paying for overnight shipping when regular delivery was utilized, or being charged double fuel surcharges.
Red Flag 6: Insufficient Segregation of Duties
From a control point of view, one of the largest red flags is having the same individual who authorizes invoices handle payments as well. This insufficient segregation of duties provides opportunities for fraud and makes it more difficult to detect errors.
68% say manual procedures heighten exposure to errors. If your team is busy, it's easy to have one person take care of several parts of the payment process. But this significantly elevates your exposure profile.
Conclusion
The retail business runs on narrow margins, so every dollar matters. If you're losing 5-10% of your profits on avoidable accounts payable mistakes, you're compromising your competitive position. The seven red flags discussed above are not hypothetical issues—they're actual concerns for retail CFOs in 2025.
Duplicate payments, missed discounts, unclaimed credits, pricing mistakes, freight overcharges, poor controls, and archaic systems all sap your profitability. Each red flag is an opportunity for quick improvement and cost recovery. The financial impact can be transformative when you catch these items systematically.
At Discover Dollar, we are experts at assisting retail CFOs in identifying and recovering missing funds and constructing workable financial processes. Our total accounts payable recovery audit service reveals elusive savings, cuts out payment mistakes, and provides you with the assurance that comes from knowing your accounts payable process is operating smoothly.