Nobody can predict exactly when a downturn will come or how deep it will go. What finance leaders can do is make sure their own processes hold up when it does. Accounts payable is a good place to start, because it touches cash, suppliers and staff workload all at once.
This post was first written as recession fears grew in late 2022. The advice holds for any period of uncertainty, whether it comes from interest rates, tariffs or a slowdown in demand. Here is how to get accounts payable ready.
What pressures does a downturn put on accounts payable?
Economic slowdowns hit accounts payable from several directions at once:
- Uneven demand: purchase volumes swing, making payables harder to forecast
- Strained suppliers: suppliers under pressure push for faster payment or change terms
- Cash pressure: every payment decision matters more when revenue softens
- Lower margins: leadership looks for savings in every process, including payables
- Fewer people: hiring freezes or layoffs leave the same work to a smaller team
The teams that cope best are the ones that prepared before the pressure arrived.
How can accounts payable prepare?
Know your cash position precisely
A complete, current picture of what you owe and when is the basis for every cash decision. With it, finance can run scenarios as conditions change and decide which payments to accelerate, which to schedule and which discounts are worth taking. With incomplete or late data, those decisions become guesses.
This depends on invoices being captured as soon as they arrive, not when someone gets to the pile. It also depends on knowing the terms behind each invoice, which is why linking payables to contract terms helps.
Secure the process for remote and hybrid teams
Many finance teams now work partly or fully away from the office. Digital invoice capture and approval let people record, approve and pay invoices from anywhere. The same shift raises the risk of fraud, such as fake invoices and requests to change supplier bank details. Role based access, approval limits and validation of any change to payment details are essential.
Communicate clearly with suppliers
Strong supplier relationships matter more in hard times, not less. If your payment priorities or schedules have to change, tell suppliers early and honestly. Surprises damage trust; a clear plan, even an unwelcome one, usually preserves it. Suppliers who trust you are more likely to work with you on terms when you need flexibility.
Increase speed and accuracy
Manual approval is slow and prone to error, and both problems get worse when staff are stretched. Late payments from a slow process add pressure on suppliers who may be struggling too, and errors such as duplicate payments cost cash you can least afford to lose.
What should you automate first?
Automate what is predictable, repetitive and important. Staff covering unfamiliar work or working with less support are more likely to make mistakes, so removing routine steps protects both accuracy and morale.
- Invoice capture: extract invoice data instead of keying it
- Matching: compare invoices to purchase orders, receipts and contract terms
- Routing: send each invoice to the right approver by rule
- Low value approvals: approve invoices below a threshold you set automatically, with a full record
- Missing documents: flag invoices that lack an order or receipt before they stall
- Duplicate detection: hold likely duplicates for review before payment
For example, if your policy says purchases under a set amount do not need a manager's sign off, a workflow can check the amount and approve the invoice by rule. Transactions move faster, the team handles fewer routine items and suppliers are paid on time.
| Downturn pressure | Accounts payable response |
|---|---|
| Cash pressure | Current payables data and scenario planning |
| Fewer staff | Automated capture, matching and routing |
| Fraud risk with remote work | Role based access and validated bank detail changes |
| Strained suppliers | Early, honest communication and on time payment |
| Cost scrutiny | Fewer errors, duplicates caught and discounts taken |
Matching each downturn pressure with a practical accounts payable response.
Where do savings come from?
Manual invoice processing carries direct costs, in the hours spent on keying, matching and chasing, and indirect costs from errors, reconciliation time and fraud. Measure your own cost per invoice and your error rate before you change anything, so you can show the effect of each improvement.
Contract terms are a frequently overlooked source of savings. Invoices that exceed agreed rates, include charges outside scope or miss a negotiated discount only get caught if someone checks them against the signed contract. In Aavenir, Invoiceflow checks each invoice against its contract, with Avy proposing the match and a person approving every exception.
What does a downturn ready accounts payable team look like?
- Every invoice captured digitally and visible with its status
- Approval rules and limits that work for remote and office staff alike
- Suppliers kept informed about payment plans and changes
- Routine work automated so a smaller team keeps up
- Invoices checked against contract terms before payment
- Clear data for treasury on what is due and what discounts are available
None of this needs a crisis to justify it. Done in calm times, it makes the team faster and more accurate; done before a downturn, it gives the business room to respond. For the common objections, see three misconceptions about accounts payable automation.
The bottom line
Accounts payable cannot stop a recession, but it can help the business ride one out. Know your cash position, secure remote approvals, talk openly with suppliers and automate the predictable work. Then check invoices against contracts so you pay only what you agreed to.