How to speed up the AP month-end close

In many companies, the first week of the month goes on closing the previous one. Much of that time belongs to accounts payable: invoices nobody has posted, pending approvals and differences dragging on for weeks. The close isn’t delayed on day one: it is delayed all month long.

Why accounts payable delays the close

• Invoices received but not yet posted.
• Posted invoices waiting for approval.
• Goods received without an invoice, which need an accrual.
• Unresolved price or quantity differences.
• Duplicates and credit notes to check before paying.

What you can do during the month

• Post daily, not in batches at month end.
• Approve continuously: each invoice reaches the decision-maker as soon as it arrives. How to speed up approval.
• Resolve differences when they appear, while the order and delivery note are still fresh.
• Review goods received without invoice every week, so the month’s accrual isn’t a surprise.

Month-end close checklist

• Every invoice received is posted or under review with the reason flagged.
• No approval has been pending longer than the limit you have set.
• Goods received without an invoice are identified to accrue the month’s expense.
• Price and quantity differences are resolved or documented.
• Possible duplicates have been checked before the payment run.
• The supplier balance reconciles with the general ledger.

Accruals and other terms in the glossary.

Metrics to know it is improving

• Days accounts payable takes to close the month.
• Invoices still to post or approve at month end.
• Average age of pending approvals.
• Share of invoices posted in the month they arrive.

Mandatory e-invoicing will make it compulsory

Under Spain’s e-invoicing rules, the recipient will have to report acceptance or rejection and payment within four business days. Keeping invoices up to date stops being good practice and becomes an obligation. Dates and obligations of mandatory e-invoicing.