When finance teams tackle the month-end close process, they often find themselves buried in paperwork and spreadsheets. On average, it takes two weeks to complete the month-end close when done manually, with vendor reconciliation being a significant chunk of that time. This process alone accounts for 10-20% of the month-end close, translating to 3 to 4 days spent on matching invoices, payments, and credit notes. Fortunately, AI-powered vendor reconciliation is now making this task faster and more efficient.
Why Vendor Reconciliation is Time-Consuming
Vendor reconciliation involves matching the company’s accounts payable ledger with the vendor’s statements. For many finance teams, this means going through over 100 lines of invoices, payments, and credit notes for each vendor, verifying each line to ensure everything is accounted for. If there’s a mismatch—say, a difference in the invoice amount or an unrecorded payment—the team must communicate with the vendor to resolve the issue.
The problem doesn’t end there. Vendor statements often come in different formats—PDFs, Excel sheets, printed documents, and emails. This variability makes the task even more time-consuming as finance teams extract and manually input data into their accounting systems. When discrepancies arise, endless email chains with vendors become necessary to resolve the mismatches, taking up even more time and adding to the complexity.
How AI Simplifies Vendor Reconciliation
AI is now transforming vendor reconciliation, making it faster and more accurate. AI-powered vendor reconciliation solutions can automatically extract and digitize all the details from vendor statements, regardless of the format. This technology can read PDFs, Excel sheets, emails, and other documents, extracting information with high accuracy.
Once the data is extracted, AI can validate each line item in the vendor statements, including subtotals, taxes, and withholding amounts. It can then automatically calculate any differences and flag mismatches for review. This reduces the risk of human error and speeds up the process.
Imagine going from manually verifying hundreds of line items to having an AI system do it in minutes. This is what “inverting the pyramid” means—turning a traditionally labor-intensive task into a streamlined, automated process so finance teams can focus on more strategic tasks.
Real Impact of AI-Powered Vendor Reconciliation
With AI, vendor reconciliation can go from a multi-day task to just 1-3 hours. Instead of spending 3 to 4 days monthly on reconciliation, your finance team can focus on more strategic activities like financial planning and analysis.
By speeding up vendor reconciliation, AI significantly reduces the time required for month-end closing. This is not just about making life easier for accountants; it’s about enabling finance teams to provide more timely and accurate financial insights. In a world where businesses need to be agile, having quick access to accurate financial data is a game-changer.
Ready for What’s Next?
AI isn’t just a buzzword; it’s a powerful tool that can transform how finance teams work. By automating vendor reconciliation, AI can do the heavy lifting, freeing up your finance team to focus on strategic tasks that drive business growth.
So, the question is: Are you ready to let AI handle the heavy lifting?
