What the Commercial Payments Bill could mean for SAP accounts payable teams

An invoice appears on a supplier statement but cannot be found in SAP. The AP team searches its inboxes, checks whether it was sent to another entity and asks the supplier to provide another copy.

By the time the invoice is posted, approved and added to a payment run, the agreed payment date has passed.

In a large SAP environment, late payments often begin this way. They are not always deliberate decisions to hold cash. They can result from missing invoices, supplier statement mismatches and exceptions that remain unresolved for too long.

The Commercial Payments Bill currently before Parliament could make those operational delays more expensive and more visible.

The Bill proposes a 60-day maximum payment term, subject to limited exemptions, alongside mandatory interest on late payments at 8% above the Bank of England base rate. It would also introduce a deadline for raising invoice disputes and give the Small Business Commissioner stronger powers to investigate poor payment practices.

For accounts payable teams managing thousands of supplier transactions in SAP, the key question is how quickly the existing process can identify and resolve a problem before an invoice becomes late.

Late payment could carry a clearer financial cost

Businesses can already claim statutory interest on qualifying late commercial payments. In practice, suppliers may choose not to claim it because they do not want to damage an important customer relationship.

The Commercial Payments Bill proposes making statutory interest mandatory, with no option to remove it through the terms of a commercial contract.

The proposed rate is the Bank of England base rate plus 8%. This is the source of the campaign’s “Base + 8” message.

For a business processing a small number of invoices, the exposure may be relatively easy to monitor. For a large organisation with thousands of active vendors and several SAP company codes, small delays can accumulate across a significant invoice population.

The cost will depend on invoice values, the length of each delay and the final form of the legislation. However, the direction is clear: businesses will have a stronger financial incentive to prevent invoices from becoming late.

The 30-day dispute window matters to AP teams

The proposed invoice dispute deadline may have the greatest impact on day-to-day accounts payable operations.

Under the current proposals, businesses would generally need to raise a dispute within 30 days of receiving an invoice. If a dispute is raised after that period, the purchaser could still be required to pay the invoice in full within the agreed terms, with statutory interest applying if it becomes late.

This changes the value of early exception detection.

If a team only identifies supplier statement differences during a monthly reconciliation, much of the proposed dispute period may already have passed. A mismatch found on day 25 leaves little time to retrieve the invoice, investigate the difference and formally communicate the dispute.

The process therefore needs to identify problems soon after the invoice arrives, rather than treating supplier statement reconciliation as a final month-end check.

How invoices become late in SAP

SAP records invoices and other items posted to the vendor account. What standard SAP does not do is automatically compare an external supplier statement with the accounts payable ledger.

The AP team must establish whether every item shown by the supplier also appears in SAP. In many organisations, this means exporting SAP data to a spreadsheet and matching it manually against the supplier statement.

A missing invoice may remain invisible until the supplier sends a statement or contacts the AP team. A duplicate, credit note or value difference may enter an exception queue without a clear owner. Items can then sit unresolved while the payment date approaches.

The same problem becomes harder to control across multiple entities. One supplier may trade with several company codes, with each local team reconciling the account separately. The organisation does not have a single view of which invoices are missing, disputed or already overdue.

When an invoice eventually becomes late, the immediate problem appears to be the missed payment date. The underlying cause may have occurred several weeks earlier when the exception first entered the process.

Published payment performance adds another layer

Large UK businesses already publish information about their payment practices through the government’s payment practices reporting service.

This includes how quickly invoices are paid and the proportion paid outside agreed terms. The reporting requirements also provide greater public visibility of late payments and invoices that remain unpaid because of disputes.

The Commercial Payments Bill proposes stronger accountability for persistently late-paying businesses, including additional powers for the Small Business Commissioner.

Payment performance is therefore becoming a broader finance and reporting issue. It affects supplier relationships, potential interest exposure and the information available to customers, investors and other stakeholders.

Improving the published figures begins with the operational processes behind every payment run.

Finding supplier statement exceptions earlier

BEST Vendor Recons automates the comparison of supplier statements with accounts payable data inside SAP.

Statements can be matched against the vendor account without exporting financial information to a separate reconciliation platform. Matching items are identified automatically, while missing invoices and other discrepancies are presented to the AP team as exceptions requiring attention.

This helps teams find problems earlier and focus their time on the items that genuinely require investigation.

Heineken Beverages uses BEST to process more than 700 vendor reconciliations each month, with 99% of items automatically matched. Foodstuffs reduced the time required to reconcile 300 vendors from 1.5 days to 25 minutes.

For AP teams preparing for the proposed payment changes, the value is not limited to reducing manual work. Earlier reconciliation gives the team more time to investigate an exception before the invoice reaches the dispute or payment deadline.

Open items also need attention

Finding a missing or mismatched invoice is only part of the process. SAP vendor accounts may also contain large volumes of open items that could be matched and cleared.

These can include payments, invoices, credit notes and other entries that offset one another but remain open because the relationship has not been recognised and processed.

BEST Open Item Clearing automates this matching and clearing process across multiple companies and account types.

Together, Vendor Recons and Open Item Clearing help AP teams improve the information used to manage disputes, supplier balances and payment runs.

Preparing before the Bill becomes law

The Commercial Payments Bill is still progressing through Parliament, and its provisions may change before it becomes law.

Finance teams do not need to wait for the final legislation to examine the processes that cause invoices to become late.

A useful starting point is to measure how long it takes the AP team to identify a missing invoice or supplier statement mismatch. The organisation should also understand how exceptions are assigned, how disputes are recorded and whether long-running open items are visible across company codes.

If an invoice discrepancy can remain hidden until the next monthly reconciliation, the process may not provide enough time to respond within the proposed dispute period.

The Bill is not yet law, but the AP processes that will determine future payment performance are already running.

To see how BEST identifies supplier statement exceptions and clears open items inside SAP, book a demo.