Accounts Payable Best Practices for Canadian Finance Teams

Did you know that Canadian companies lose, on average, a staggering 5% of their annual revenue to fraud? Much of that risk lives right inside your accounts payable (AP) department. As you scale, the comfortable patchwork of spreadsheets and e-transfers that got your business off the ground quickly becomes your biggest liability.

The truth is, the toolkit that built your first million in revenue will break on the path to fifty million. This guide is for leaders who know they need to evolve. We’ll move past the basic tips and give you the strategic playbook to turn your vulnerable AP function into a secure, scalable engine for your global ambitions.

The Full-Cycle AP Process in Canada

Before we discuss the challenges, let’s consider the path a single invoice takes through your company. You know this journey well, but it has uniquely Canadian hurdles.

It starts with the invoice arriving, matched against a purchase order, and then coded correctly. This is where your AP process faces its first critical test: the complexities of GST/HST AP.

This is about your ability to reclaim your Input Tax Credits (ITCs) from the Canada Revenue Agency (CRA). To get this right, your team needs to capture the supplier’s GST/HST registration number and the precise tax amount from every single invoice, as the CRA requires. Get it wrong, and you’re risking a compliance headache if and when you’re audited by the CRA

Once coded, that invoice goes through an approval chain and is finally queued for payment, which for a Canadian business typically means executing an electronic funds transfer (EFT) payment or using modern Interac AP solutions.

Only after the payment is sent and reconciled in your general ledger is the cycle truly complete. Any friction at any step creates a backlog that can be felt across the entire business.

Step-by-Step Breakdown of the AP Workflow

The Top 10 AP Challenges and Best Practices for Canadian Businesses

Overcoming the hurdles in your AP department requires adopting a new, strategic mindset. The challenges you face, from slow invoice approval to complex cross-border payments, are interconnected symptoms of a system that hasn’t kept pace with your company’s growth.

Below is a roadmap outlining the ten most critical challenges plaguing scaling Canadian businesses and the best practices required to build a truly modern, resilient, and strategic AP function.

Summary Table: AP Challenges and Best Practices for Canadian Businesses

1. Challenge: The Manual Grind is Slowing Your Financial Close to a Crawl

Your finance team is sharp, but they’re buried. They spend their days chasing approvals across the country, trying to get a manager in Calgary to sign off on an invoice while your head office in Toronto waits.

They manually key in data from hundreds of invoices, a process that’s not just tedious but ripe for human error. According to the Institute of Finance and Management (IOFM), this manual grind can cost your company $12 or more for every single invoice you process.

But the real, strategic cost shows up at the end of the month. Because your data is always days or weeks behind, your team is forced into a guessing game, manually calculating accruals for unprocessed invoices just to close the books.

This slows down your financial reporting, making it difficult for you to make agile, data-driven decisions. You’re always looking in the rearview mirror.

Best Practice: See Everything in Real-Time with End-to-End Automation

It’s time to stop scanning documents and start automating the entire flow. This begins with modern OCR and AI (artificial intelligence) that understand your invoice and capture line-item details instantly.

Suddenly, that manager in Calgary can approve the invoice on their phone before their first coffee, and the system instantly moves it along. This gives you a live, accurate view of your company’s liabilities at any moment.

You’re no longer just focused on payment processing — you’re managing your cash flow with precision, accelerating your financial close, and giving your leadership the visibility they need to steer the business forward.

2. Challenge: The Cross-Border Payments Maze

Your business is growing. You’ve just signed a key supplier in the United States, and now you have to pay them. This is the exact moment the simple, domestic AP process you relied on begins to crack. 

Suddenly, your team, who are masters of the Canadian EFT system, are thrown into a completely different world of US ACH payments, with its foreign routing numbers and unique data rules.

What’s the knee-jerk reaction for most Canadian companies? You open a separate, high-fee US bank account. You start sending expensive wire transfers, eating terrible FX rates from the big banks along the way. 

Each payment becomes a project. Multiply that by a hundred international suppliers, and you’re no longer just running a business; you’re managing a complex and inefficient international treasury operation. 

Best Practice: Unify Global Payments on a Single, Intelligent Platform

Stop wrestling with a dozen different banking portals. The smartest move is to centralise everything on one platform that acts as your command centre for cross-border transactions.

Think about it this way: you fund your account in Canadian dollars, and from that single source, you tell the platform to pay your vendor in Chicago via ACH and your consultant in Berlin via Single Euro Payments Area (SEPA). 

The single platform system handles all the complex routing and currency conversion automatically, often at far better FX rates than your bank would ever offer. This approach eliminates the need for multiple foreign bank accounts and turns a major operational bottleneck into a streamlined, cost-effective process that actually fuels your international growth instead of slowing it down.

3. Challenge: The Complex Web of Tax and Compliance

“Compliance” is a word that can keep a finance leader up at night. If ignored or done wrong, it can have serious financial consequences.

Your AP team is constantly on the front lines, trying to capture the right GST, HST, or PST from every single invoice just so you can claim your Input Tax Credits. One slip-up, one missed registration number, and that’s cash the CRA will be reluctant to give you back.

Then you start paying suppliers outside of Canada. Now what? Suddenly, you’re faced with collecting W-8BEN forms from US contractors to avoid hefty IRS withholding tax. You’re trying to process bilingual invoices from Quebec. And you’re tasked with securing all of this sensitive bank and tax information according to Canada’s strict Personal Information Protection and Electronic Documents Act (PIPEDA) regulations. 

Trying to manage this chaotic mix with spreadsheets and email is a high-stakes gamble with your company’s compliance.

Best Practice: Automate Tax and Data Compliance from End-to-End

You can’t manage this level of risk manually. The only scalable solution is to build compliance directly into your AP workflow with an automated system that acts as your central record for all things tax and data.

This starts with a self-service supplier portal. Instead of your team chasing down tax forms, new vendors are guided through an intelligent, digital process. The system knows whether to ask for a T4A, a W-9, or a W-8 and validates the information in real time.

This secure portal also strengthens your PIPEDA compliance by transferring data entry responsibility to the supplier, all within a fully encrypted environment. Suddenly, Canadian AP compliance isn’t a manual checklist item you hope you got right. It’s an automated, auditable, and secure part of every transaction you process.

4. Challenge: The Open Door for Fraud and Human Error

When your company is in high-growth mode, your internal controls are usually the first casualty. You’re moving fast, focused on the market, and the accounts payable department, the function where almost every dollar leaves the company, becomes a soft target. The threat isn’t just a sophisticated phishing attack from the outside. The bigger, more insidious risk often lives inside your own processes.

Can one of your employees set up a new vendor in your system and then turn around and approve a payment to that same vendor? Can a simple typo on an invoice number lead to a five-figure duplicate payment slipping through the cracks?

These are the everyday realities that result from manual processes and a lack of systematic checks and balances. Relying on human diligence alone is a strategy that is guaranteed to fail, leaving your company exposed to significant financial loss.

Best Practice: Embed Proactive Financial Controls Directly into Your Workflow

The most effective way to combat fraud isn’t with a post-payment audit; it’s by designing a system that makes it nearly impossible to commit fraud in the first place. Modern AP automation lets you build your financial controls directly into the software, effectively eliminating human error and temptation.

This starts by enforcing a strict Segregation of Duties (SoD). You can configure the system to prevent the same person who onboards a vendor from also approving a payment to them. 

You can mandate automated three-way matching for all PO-backed invoices, ensuring nothing gets paid unless it aligns with what was ordered and received. 

Better yet, advanced AI can monitor for anomalies such as a supplier suddenly changing their bank details right before a payment run and flag them for review. You’re no longer just detecting fraud after it happens; you’re actively preventing it from ever getting into your workflow.

5. Challenge: Drowning Your AP Team in Low-Value Supplier Inquiries

Take a walk over to your AP team and ask them what they spend most of their day doing. Is it high-level financial analysis? Is it finding new ways to optimize cash flow? Probably not. 

It’s far more likely they’re acting as a de facto call centre, answering the same handful of questions, over and over again, from your suppliers. “Did you get my invoice?” “Is it approved?” “When am I getting paid?”

Each call and email is a small cut to your team’s productivity. But multiply that across hundreds, or even thousands, of suppliers, and it becomes a deep wound.

This constant stream of low-value inquiries forces your sharpest finance minds to spend their days on administrative tasks. It also creates a deeply frustrating experience for your suppliers, leaving them in the dark and forcing them to chase you for information, which can put a strain on even your most critical vendor relationships.

Best Practice: Deploy a Self-Service Supplier Portal

It’s time to get your AP team out of the communications business for good. The best practice is to give your suppliers a secure, 24/7 digital gateway where they can find every answer they need, all on their own.

A self-service supplier portal is a single place where a vendor can onboard themselves, submit invoices electronically, update their own banking information, and, most importantly, check the real-time status of their vendor payments. 

They don’t need to call you because they can see for themselves that their invoice was received, that it was approved yesterday, and that the payment is scheduled for next Tuesday. 

This simple shift empowers your suppliers, builds stronger and more transparent relationships, and frees your finance team to focus on the high-value, strategic work you hired them to do.

6. Challenge: Flying Blind with No Real-Time View of Your Spending

Here’s a tough question for any finance leader: Do you actually know where your company’s money is going right now? For most scaling businesses, the honest answer is a very uncomfortable “no.” 

When purchasing is decentralized—occurring on different credit cards, via rogue email requests, and without a formal purchase order (PO) process—your finance team is completely in the dark. You have no visibility into the money your company has committed to spend until an invoice unexpectedly shows up at your door, weeks or even months later.

This lack of real-time visibility is not only disorganised, it’s dangerous. How can you possibly control departmental budgets if you don’t know what has already been spent? How can you negotiate better prices with your key suppliers if you have no consolidated view of your purchasing patterns? 

Your finance team is left perpetually playing catch-up, trying to build a financial picture from lagging, incomplete data. This is not a stable foundation for growth.

Best Practice: Integrate Your Procurement Process with AP

The only way to gain control over your spending is to manage it before it happens. The best practice is to implement a unified procure-to-pay (P2P) system that connects the procurement process directly to the AP workflow, closing the loop once and for all.

This means that every significant purchase must start its life as a digital purchase order, which is then routed through a formal approval workflow before any commitment is ever made to a vendor. 

Once that PO is approved, it’s logged in the system, giving you an immediate, real-time view of your company’s committed spend. When the final invoice arrives, it’s automatically matched against that pre-approved PO. 

This eliminates maverick spending and gives your finance team the end-to-end visibility they need to control budgets, forecast cash flow accurately, and lead with confidence.

7. Challenge: Trapped in a Cycle of Linear Growth and Rising Headcount

Here’s a simple test for your AP process. If your revenue doubles next year, will you have to double the number of people on your AP team just to handle the flood of new invoices? 

For most companies running on manual or semi-manual systems, the answer is a hard “yes.” This is the linear growth trap, and it’s one of a scaling company’s greatest enemies.

Every time you have to hire another person to do low-value, repetitive work like keying in invoice data, that’s a direct hit to your bottom line. It’s an investment you can’t make in your product, your sales team, or your marketing. 

Your AP department becomes a cost centre that grows in lockstep with your success, acting as a financial anchor that slows your momentum. You find yourself unable to scale efficiently because your back-office operations simply can’t keep up. This is a clear sign of a broken foundation.

Best Practice: Design Your AP Systems for Scalability, Not Linear Growth

The goal is to completely shatter the link between your company’s growth and your operational headcount. The best practice is to implement an AP automation system that is engineered from the ground up to handle a tenfold increase in your business without needing to add a single new person to the team.

Think of it as building a six-lane highway instead of just adding more cars to a single-lane road. A truly automated system will handle the vast majority of your transaction volume without any human touch; from capturing the invoice data to matching it, routing it, and scheduling the payment. 

This allows your lean, expert AP team to focus only on the high-value exceptions and strategic work. By doing this, you decouple your operational costs from your revenue growth, giving you the freedom to scale fearlessly, without being weighed down by a bloated back office.

8. Challenge: Bleeding Cash Through Reactive and Unstrategic Payments

How much thought goes into when you pay your bills? For most growing companies, the process isn’t strategic at all — instead, it’s a chaotic, reactive scramble. 

You’re either paying invoices the moment they arrive just to get them off your desk, which needlessly drains your cash reserves and hurts your Days Payable Outstanding (DPO). 

Or, you’re so disorganised that payments slip through the cracks, forcing you to pay late, which racks up unnecessary late fees and, more importantly, damages the very supplier relationships you need to grow.

Even more costly is the opportunity you’re missing. Many of your suppliers offer valuable early payment discounts, typically 1-2%, for paying an invoice within 10 or 15 days. But your manual approval process is so sluggish that by the time you’re finally ready to pay, that discount window has long since closed. 

You are literally losing money with every payment run because you lack the visibility to be strategic with your working capital.

Best Practice: Optimize Your Payment Timing to Actively Manage Cash Flow

A modern AP system transforms your payables into a powerful tool for managing cash. The best practice is to use a platform that gives you a clear, real-time dashboard of every outstanding payable, complete with their exact payment terms, due dates, and any available early payment discount terms.

This visibility gives you the power of choice. Do you see a 2% discount offer from a key supplier? The system flags it and helps you accelerate the approval so you can capture those savings, which go straight to your bottom line. 

For all other non-urgent payments, you can confidently schedule them to be paid just before they are due, letting you hold onto your cash as long as possible to optimize your working capital. Instead of reacting to a pile of bills, you’re actively and strategically managing your company’s financial resources.

9. Challenge: The Multi-Entity Nightmare of Managing Your Own Growth

Your Canadian company just launched its first US subsidiary to better serve your American customers. This is a huge milestone, but it also shattered your entire financial operation. 

Now, you’re running two completely separate AP processes. One set of books in Canadian dollars is managed in your Canadian ERP, and another set of books in US dollars is in a totally separate QuickBooks file. 

Your teams are juggling different bank accounts, different vendor lists, and different approval rules.

How can a finance leader get a clear picture in this environment? Getting a single, consolidated view of your company’s total cash position becomes a painful, manual exercise in exporting data into a master spreadsheet at the end of every month. 

There is no real-time visibility. Managing intercompany transactions—like your Canadian parent company billing your US subsidiary for shared services—becomes a complex reconciliation headache that eats up your team’s time and breeds errors.

Best Practice: Adopt an AP Architecture for a Single Source of Truth

This setup allows your global finance team at the “Parent” company in Canada to see a real-time, consolidated dashboard of cash flow and spend across every single one of your subsidiaries, in any currency. 

At the same time, your team on the ground at the “Child” entity in the US can operate in their own environment, managing their local vendors and currency with their own specific rules, while all their data rolls up seamlessly. 

This structure also lets you automate the messy process of intercompany billing and reconciliation, finally giving you the single source of truth you need to manage a global organisation effectively.

10. Challenge: Drowning in a Sea of Disconnected Systems

Take a moment and honestly map out your current AP process. What does it look like? For most companies, it’s a tangled web of disconnected tools. 

Invoices arrive in one system (your email inbox). You track their due dates in another spreadsheet. You chase down approvals in a third (Slack or Microsoft Teams). 

You execute the actual payments in a fourth (your online banking portal). And finally, you manually enter everything into a fifth (your ERP system) to update the books.

This is a recipe for chaos, not a workflow. There is no single source of truth. Documents get lost in email threads. Approvals are forgotten in crowded chat channels. Payments are made without being properly recorded. 

When an auditor requests the complete history of a single transaction, it becomes a forensic investigation, forcing your team to spend hours, or even days, piecing together the story from five different sources. This is a massive operational and compliance risk waiting to blow up.

Best Practice: Unify the Entire AP Workflow in a Single, Integrated Platform 

The ultimate best practice—the one that elegantly solves nearly every other challenge on this list—is to bring every single step of the AP lifecycle into one unified and integrated platform. This creates a seamless, unbreakable chain of information from start to finish.

An invoice is received electronically and directly into the system. It is automatically coded and matched. It is digitally routed for approval. Once approved, the payment is executed from within that same platform. 

Finally, the entire transaction record, complete with a detailed audit trail of every action taken, is automatically synced back to your ERP in real time. This creates a bulletproof, single source of truth for your entire payables operation, giving you unparalleled control, visibility, and efficiency.

AP Automation Tools Popular in Canada

As your business evolves, your tech stack has to keep up. Most Canadian companies start their journey with solid, foundational accounting tools like QuickBooks Online Canada or Sage. 

As spend management becomes more complex, you might layer on a point solution like Float, which is purpose-built to handle Canadian corporate cards and employee expense reports. However, the moment your operations really start to scale—especially across borders—you’ll begin to feel their limits. 

You’ll find yourself wrestling with the complex realities of global mass payments, multi-entity accounting, and international tax compliance. These are challenges that basic accounting packages and spend management tools were simply not built to handle at scale.

This is the natural inflection point where you graduate. You move from a collection of separate tools to a comprehensive, end-to-end platform. 

Tipalti: Streamlined AP Automation for Growing Businesses

Tipalti’s end-to-end AP automation serves as your operational command center, built to integrate seamlessly with your ERP. It automates the entire payables lifecycle and shifts your finance function from managing payments to optimizing global operations.

Building a World-Class Canadian AP Function

The manual, disconnected AP processes that once served your business are now a direct barrier to your growth. For any ambitious Canadian company, the serious challenges of cross-border payments, complex tax compliance, and operational bottlenecks can no longer be solved by hiring more people or building bigger spreadsheets. 

By embracing the strategic best practices of end-to-end automation, you can finally transform your AP department from a reactive, back-office cost centre into a strategic hub that strengthens your financial controls, optimizes your cash flow, and gives you the scalable infrastructure you need to compete—and win—on a global stage.