The NCAA college basketball tournament is here. That means it’s time to get ready for thrilling last-second finishes, dramatic overtime victories, and stunning upsets. It’s all part of what makes March Madness so great. You never know what’s going to happen.
While that high drama may be great for college basketball, it’s less than ideal when it comes to your month-end closing process. That’s when you want things to go smoothly and predictably. So, why does it always feel like you’re left biting your nails as time runs out on the month?
Let’s look a little closer at some of the issues in accounts payable and accounts receivable that tend to plague finance teams.
Struggling with the fundamentals
In basketball, teams that have a hard time with the basics aren’t going to go far. That’s why coaches put so much time into things like passing, rebounding, and free throws. Those simple tasks are the building blocks of a team’s success.
For finance teams, the situation is the same. Teams that struggle at month-end are typically those who haven’t mastered the fundamentals.
On the accounts payable side of things, which may look like this:
- Missing or disorganized invoices – When invoices get misplaced or lost, it creates bottlenecks in the process. This frequently happens with paper invoices, as well as digital invoices shared informally through email. A lack of centralized storage is also a key culprit.
- Data entry errors – The most generous of estimates suggests a 1% error rate for manual data entry. That means, in the best-case scenario, 1 out of every 100 pieces of data input into your system is likely wrong. It can be caused by something as simple as transposed numbers, a decimal in the wrong place, or a typo.
- Reconciliation issues – Data entry errors, duplicate payments, failed three-way matching, and improper coding can all lead to reconciliation issues. This can potentially lead to financial loss, operational inefficiency, and damaged vendor relationships.
- Approval delays – Informal approval workflows can lead to bottlenecks in your process. Invoices can be misplaced or lost in the shuffle of an inbox, and your AP reps spend hours or days chasing down the appropriate approver. It’s a significant problem at any time, but particularly damaging when you’re trying to close out the month.
- Accrual complexity – When you’re under a time crunch, it can be difficult to navigate expenses that have been incurred but not yet invoiced. It’s complicated even more if you’re relying on low visibility, manual processes like spreadsheets to store your data.
Of course, AP is just one side of the game. Failing on the fundamentals in accounts receivable can be just as damaging to your month-end process. Here’s what that may look like:
- Delayed payments - Late payments from customers disrupt cash flow, often with 33% of invoices being overdue by more than a month. These can be caused by inconsistent follow-up, limited payment options, or even manual data entry, spreadsheets, and paper invoices, which slow processing time.
- Invoice disputes – Errors in billing or unmet expectations can lead to invoice disputes, which make it difficult to accurately close out your month. It’s a problem that’s exacerbated by inconsistent and slow follow-up, as well as siloed data which makes it difficult to research issues when a customer reports them.
- Cash application bottlenecks – Whether it’s missing remittance data, manual data processing, or poor system integration, challenges in cash application can wreak havoc on your month-end, leading to inaccuracies in the general ledger, ballooning DSO and misstated, overdue customer balances.
- Data inconsistencies – Data challenges lead to bottlenecks during month-end by causing sales ledger and general ledger mismatches, which delay closing and require manual, time-consuming reconciliations.
Any one of these issues is enough to make the month-end “game” go down to the wire, but pile them on top of each other and you’re much more likely to end up taking a loss.
A game-winning formula
If failing at the fundamentals can sink your team, mastering them is obviously the key to victory. That means embracing the tools that give your team the best opportunity to succeed. In accounts payable and accounts receivable, that means embracing automation enhanced by artificial intelligence (AI).
An integrated automation solution provides you with a single source of truth for your data in accounts payable or accounts receivable. The software integrates with your ERP and CRM software, eliminating the need to transfer information manually from place to place, helping eliminate the possibility of data entry errors. This centralized data eliminates the possibility of data silos, as information is easily accessible to all stakeholders, and can quickly be shared.
When an invoice is received, it is scanned by optical character recognition (OCR), and vital data is captured from the invoice. With the help of machine learning, the items are then coded and processed directly into your system. The system then immediately conducts three-way matching, without the risk of data entry errors causing issues. The system’s AI also scans for potential duplicates, identifying any anomalies and flagging them for review.
The invoice is then automatically routed to the appropriate approver through the system’s customizable approval workflows. Once it has been delivered, regular follow-ups are sent to the approver until the sign-off.
With the help of AI and predictive analytics, the software can also help optimize your payment schedule, ensuring that invoices are paid and closed out in a timely manner, while allowing you to get the maximum value from your cash.
On the AI side of things, AI-assisted automation helps decrease the risk of late payments, speed up dispute resolution and make cash application a breeze. Invoices are automatically delivered to customers through their preferred method, and follow-ups are automatically sent out to customers until payment is received.
AI analysis of past payments can predict which invoices are likely to be paid late, allowing your team to prioritize those cases to come up with a resolution, lowering the risk of delinquency. And because the software uses machine learning, these predictions continually get more accurate. The best solutions can make these predictions with 94% accuracy.
By providing a customer self-service portal, customers are able to log in at any time and view their open invoices, make payments using their preferred method, and open disputes. By making it easier for customers to pay, it increases the likelihood that payments will be sent on time.
When a dispute does occur, it is quickly scanned by AI. Issues that don’t require human intervention, such as a customer claiming they never received an invoice, are handled by AI, taking immediate action such as sending them a copy of the invoice. Those that require human review are flagged and directed to a queue for follow-up, helping lead to faster dispute resolution.
After payment has been submitted by the customer, the software fully automates the cash application process. Data is extracted from remittance advice and quickly matched to invoices. In addition, because the software integrates with your ERP application, payments are automatically connected to the correct invoice and then the cash is transferred back to the ERP in real time. In the event of missing customer information, AI will study past transactions and recommend the account most likely associated with the payment.
With these tools at your disposal, the fundamentals of AP and AR aren’t just made easier, they practically become second nature. And by solving the typical challenges that teams face at month-end, it makes the process smoother and faster. No more scrambling to beat the buzzer!
Coming through in the clutch
During March Madness, every basket counts, and every game is win or go home. Winning it all takes teams who know how to deliver consistently when everything is on the line.
Succeeding in finance, particularly at month-end, depends on a finance team that operate the same way: mastering each fundamental of the payables and receivables process. The easiest way to do that is to embrace automation.
To see if your finances are ready to win, and win big, check out our on-demand webinar — Are Your AP & AR Processes Fit for 2026? A Practical Workflow Scorecard.