Year-End Close—Stop Writing Off Good Money
- The HRG Team
- 9 hours ago
- 3 min read
The first two weeks of January are when finance teams do something heroic.
They take a year of real-world chaos—short shipments, pricing updates, promotions, returns, compliance issues—and force it into clean financial statements.
But here’s the uncomfortable truth: year-end close is also when perfectly recoverable dollars get written off because the team is exhausted, the documentation is scattered, and leadership just wants the books closed.
If holiday volume is strong (and it was expected to be), that pressure intensifies. The National Retail Federation (NRF) projected $1.01–$1.02 trillion in U.S. holiday sales for 2025 (November–December), up 3.7% to 4.2% versus 2024.
Big volume creates big opportunity. It also creates big reconciliation risk.
The “write-off trap” that hits in January
Write-offs occur for many valid reasons. But in early January, you also see write-offs driven by:
Timing (the deduction hit, but the back-up didn’t)
Ownership gaps (Sales thinks Finance has it; Finance thinks Supply Chain has it)
Portal fatigue (too many systems, too little time)
Data mismatches (invoice-level vs. item-level vs. purchase order-level logic)
Low confidence (“I can’t prove it fast enough, so I’ll clear it”)
That last one is the killer: Because “I can’t prove it” is not the same as “it’s valid.”
A fictional example (to make it concrete)
Fictional scenario: A controller sees $180,000 in open deductions sitting in an “aging” bucket. One analyst suggests writing off anything older than 90 days to hit the close deadline. It seems reasonable—until they sort by reason code and discover a cluster of duplicates and pricing mismatches tied to a single retailer cost update that never synced properly.
Those weren’t “old.” They were “untriaged.”
That’s the moment when a process saves real money.
A simple year-end close strategy: turn chaos into decision lanes
In early January, your goal isn’t to solve everything.
It’s to classify quickly and accurately, so you can stop bleeding cash through unnecessary write-offs.
Step 1: Break deductions into three lanes
Lane A: High confidence/high win
Duplicates
Transparent pricing or cost differences with documentation
Shortage disputes with clean proof of delivery (POD) and item mapping
Promo deductions where the authorization is already in hand
Lane B: Potential win, missing pieces
Claims where photo or documentation evidence exists but isn’t centralized
Promotions with partial backup (ad ran, but item list is messy)
Returns/damages needing disposition detail
Lane C: Low probability/low value
Small-dollar items where the effort exceeds recovery
Claims with no documentation pathway
Known-valid deductions
Close gets easier when Lane A gets protected time.
Step 2: Build a “close-ready” recovery dashboard (one screen)
You don’t need a perfect data warehouse to get value here.
A basic dashboard can include:
Total open deductions by retailer
Top 10 reason codes by dollars
Aging buckets (0–30 / 31–60 / 61–90 / 90+)
Top 20 SKUs by deduction dollars
Dispute cycle time (average days to submit/resolve)
This gives leadership a defensible narrative: “Here’s what we’re pursuing and why.”
Step 3: Treat documentation like a product, not a scavenger hunt
If your disputes depend on “asking around,” you’ve already lost.
Create a standard package per claim type—stored in one place—and make the handoff routine:
Invoice and purchase order (PO) references
Proof of delivery (POD)
Item-level mapping (shipped vs. claimed)
Retailer correspondence and portal screenshots
Promotion authorizations (when relevant)
If it’s repeatable, it becomes scalable.
Step 4: Put guardrails on write-offs
Consider a simple rule: No write-off above a set threshold (for example, $5,000 or $10,000) without:
Reason code validation
A documented “why we can’t dispute” note
Approval by a second reviewer
It slows you down slightly in January. It saves you materially over the year.
Where HRG fits
HRG’s role in year-end close is straightforward: help suppliers separate valid deductions from avoidable loss, and turn disputes into a disciplined workflow instead of a heroic scramble.
If your team is closing the year with a big aging bucket, a helpful first step is a quick diagnostic: which claim types are most recoverable, and where is the documentation breaking down?
That’s often where the easiest money is.