How much working capital is sitting in your A/R right now just waiting to be unlocked?
As year-end approaches, every CFO is racing to tighten forecasts and protect cash flow. It’s easy to focus on new revenue or expense control, but accounts receivable often holds the biggest opportunity hiding in plain sight. Most finance leaders already know where the bottlenecks are, aging invoices, slow follow-ups, recurring billing disputes, but only a few have the bandwidth to turn that insight into action.
The truth is, a strategic approach to A/R can do more than reduce DSO. It can sharpen budgeting, lower bad debt, and unlock the liquidity you need to start next year stronger. This playbook shares practical ways to speed up recoveries, strengthen collections, and turn A/R into a true performance lever before year-end close.
Why A/R Deserves Attention Before Close
The core of forecasting, valuation, and liquidity is accounts receivable. Quicker collections will decrease the risk of bad debt, increase working capital, and lessen dependency on credit lines. Cleaner models are fed by strong A/R hygiene, this improves cash forecasting and reduces surprises at close.
Year-end is the right moment to tighten the process. You have a clear view of aging buckets, open disputes, and approval bottlenecks. Small moves now, like targeted outreach on high-balance accounts and quick fixes to billing disputes, can drive meaningful DSO reduction before the calendar turns.
Faster collections also make forecasts smarter. When you turn aging data into expected cash timing and track a few finance KPIs each week, your plan gets more reliable. Focus on DSO, recovery rate, dispute volume and days to resolve, and forecast variance. Treat these as the heartbeat of your collections strategy, and you will head into close with more confidence and more cash.
Run a One-Week A/R Diagnostic
A short, focused diagnostic can reveal where cash is getting stuck and how to free it up before close. Start by pulling your aging report and segmenting balances by bucket and customer size. Highlight the top overdue accounts by value and by days past due, this is where most recoveries begin.
Next, look at billing disputes and open credits that are holding up payment. Many past-due balances aren’t true collection issues; they’re waiting on a correction or confirmation. Reconcile these quickly to clear easy wins.
Once the surface-level problems are visible, dig into root causes. Common culprits include usage errors, contract misalignments, or delays in approval workflows. Each pattern tells you where process improvements will have the biggest impact.
Finally, prioritize recovery for your top accounts. Assign clear ownership, set next steps, and focus on accounts with the highest balance and likelihood to pay. Even a few successful recoveries this week can lift cash flow and build momentum heading into year-end.
Create a Lean Collections Strategy
Once you’ve identified where the slowdowns are, build a simple rhythm that keeps collections moving every week. Start with a short A/R standup that brings finance, sales, and success together. Review aging goals, top overdue accounts, and any blockers. Assign owners and document next steps so nothing lingers between meetings.
Use light automation to keep outreach consistent. Email templates, reminder tasks, and follow-up triggers inside your CRM make it easier for teams to stay on top of communication. Consistency does more than speed up payments, it reinforces your reliability with customers.
Set clear guardrails for settlements and payment plans so decisions stay aligned with your credit policy. Define when small discounts are acceptable, how to structure short-term payment plans, and when to pause services if necessary. These boundaries protect your revenue while giving customers a fair path to stay current.
A lean collections strategy is about clarity. When everyone knows the process, customers feel supported, and your team reduces bad debt risk while improving cash predictability.
Improve Cash Forecasting With A/R Insights
Aging data is more than a report—it’s a forecasting tool. By turning those buckets into expected cash inflows, you can predict how much will hit the bank and when. Start with a simple roll-rate model that uses DSO to estimate collection timing. This gives you a running view of what cash is truly available before year-end close.
Use a few key finance KPIs to keep the model accurate:
- DSO (Days Sales Outstanding): How quickly invoices are collected.
- Recovery rate: The percentage of overdue invoices paid this week.
- Dispute resolution time: How long it takes to clear blocked payments.
Review these metrics weekly and update your forecast to match what’s actually happening. Even small adjustments like resolving a few aging disputes or shortening response times can improve forecast accuracy. With cleaner data and consistent updates, you’ll reduce surprises and strengthen confidence in your cash position heading into close.
The Simple A/R Dashboard to Track Weekly
A focused dashboard helps your team stay proactive instead of reactive. You don’t need a complex system, you just need a single view that highlights the metrics that drive performance.
Suggested Metrics:
- DSO (Days Sales Outstanding): Tracks how quickly you collect after invoicing.
- Recovery rate: Measures the percentage of overdue invoices recovered this week.
- Aging balance by bucket: Shows where cash is trapped and which segments need attention.
- Dispute volume and days to resolve: Monitors process efficiency and customer friction.
- Forecast variance: Reveals how close your cash projections are to reality.
These metrics create a clear picture of your collections health and ARR protection. Reviewing them weekly helps you spot risks early, shift priorities, and make faster, data-driven decisions. When leadership can see progress at a glance, A/R becomes a strategic tool that supports both growth and predictability.
Make A/R a Strategic Lever, Not a Headache
Strong A/R management cleans up collections and builds confidence with investors and leadership teams. When finance leaders treat A/R as a strategic lever, they create visibility, improve liquidity, and give the business more room to make smart decisions.
If your team is heading into close with a crowded backlog or unpredictable cash, take a week to reset your A/R process. A few simple changes can improve recoveries, reduce bad debt, and give you cleaner forecasts heading into next quarter. Small wins in A/R can make a big impact on how the year ends and how the next one begins.