Henry Helgeson is an entrepreneur, investor, and CEO of BlueSnap, a global payment orchestration platform for B2B and B2C businesses.
The holiday season was once again a time for celebrations, spending time with loved ones and enjoying a well-earned break before diving into a new year. But for those in corporate finance and accounting, the season probably looked a little different.
Year-end can mean heightened pressure to collect outstanding invoices, reconcile accounts and wrap up financial reporting, especially given that over 55% of small and medium-sized businesses say late payments increase in frequency over the course of the year.
For those who suffered through the pressures of closing the books this past December, there is good news. Advanced payment technology and AR automation solutions can help ease these burdens and bring much-needed relief during the year-end crunch. (Full disclosure: My company offers some of these technological solutions, but you have many options in this space and can implement some changes without upgrading your tech.)
With that in mind, here are five common pain points finance teams probably faced in closing out the year—and how the right tools implemented today can help make next year’s close smoother and less stressful.
1. Reducing Reconciliation Headaches
Throughout the year, teams may allow invoice payments to roll over from one month to the next. But at year-end, capturing revenue and expenses accurately is critical—especially for publicly traded companies preparing for audits.
For teams using manual processes, this often means long hours spent in December toggling between spreadsheets, reconciling billing activity and hunting for missing data across disparate systems.
Finance teams can ease the year-end reconciliation burdens by establishing best practices for the documentation and coding of transactions throughout the year. Ensuring that all team members are trained and proficient with reconciliation tools and processes will reduce avoidable errors and optimize financial audit readiness as well.
Separately and additionally, adopting an automated payment system can aid in reconciliation efforts by providing real-time visibility into invoices, expenses and cash flow. With integrated technology, finance teams can reconcile activity more efficiently as the year moves along, significantly reducing stress as they close the books.
2. Ensuring Cash Availability
The end of the year often brings large financial commitments, like renewing software licenses, extending vendor contracts and paying bonuses. As a result, companies become especially mindful of cash flow in December.
To meet year-end liquidity needs without resorting to raising capital or taking on debt, finance teams should:
• Regularly monitor the flow of incoming and outgoing cash throughout the year and perform weekly or bi-weekly cash flow forecasts to spot trends and identify gaps early that might result in shortfalls as December approaches.
• Establish a cash reserve safety net by setting aside monthly revenue and parking it in a high-yield savings account or short-term, interest-earning investment.
• Deploy a payments platform that improves cash flow by reducing days sales outstanding (DSO) and ensuring the business gets paid faster and more consistently throughout the year.
3. Enhancing Cross-Organizational Visibility
Unpaid invoices don’t just affect the finance team. Often, other departments—like business development, customer service or operations—get pulled in to help resolve outstanding issues. For these teams, that are juggling their own year-end priorities, this can feel like an unwelcome distraction.
With an advanced AR management system, all stakeholders gain real-time visibility into invoice statuses. This enables earlier collaboration across departments, reducing the last-minute scramble and freeing everyone to focus on strategic activities that set the company up for success in the new year.
4. Simplifying Global Tax Reporting
Year-end tax reporting is a major undertaking, particularly for companies operating in multiple countries with unique compliance requirements. Manually gathering data from various sources under the pressure of year-end deadlines not only consumes time but also increases the risk of costly errors.
An advanced payments platform simplifies the process by centralizing critical revenue and sales data. Finance teams can access the information they need to complete tax reporting efficiently and confidently, ensuring compliance and avoiding penalties.
5. Boosting Morale During The Holidays
Chasing coworkers for information or following up with late payers is never pleasant, but it can feel especially discouraging during the holidays.
An automated AR solution minimizes this discomfort by establishing a regular cadence of outreach throughout the year, with personalized communication flows for late payments. This reduces the need for last-minute chasing, allowing employees to focus on meaningful work and enjoy the holiday season without added frustration.
Final Thoughts
Adopting modern payment technology is no longer solely about operational efficiency—it’s about supporting your team, reducing stress and setting your organization up for long-term success. Implementing the right solutions today can help alleviate the most common finance and accounting pain points throughout the year and allow everyone in the organization to have a happy holiday season.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Read the full article here
