DSO Win: One Dispute Fix That Moved Cash Faster
Disputes slow down cash flow and drain resources, but fixing one critical issue can make a measurable difference. This article examines how strengthening price data governance helped reduce Days Sales Outstanding and accelerate payment cycles. Industry experts share practical strategies that produced real results without major system overhauls.
Strengthen Price Data Governance
One order-to-cash root-cause fix that measurably reduced DSO was tightening pricing master data governance at the source rather than trying to resolve disputes downstream. We discovered that a significant portion of invoice disputes weren't customer-related at all, they were triggered by contract pricing mismatches between the CRM, ERP, and billing system.
At first glance, collections performance looked like the issue. But when we tagged disputes by reason code, pricing discrepancies consistently ranked at the top. The fix was simple but disciplined: a controlled approval workflow for price overrides and a nightly validation check that flagged any invoice generated outside approved contract terms before it went out.
The first metric that moved wasn't DSO, it was dispute rate at invoice creation. Within 30 days, pricing-related disputes dropped by nearly 40 percent. That directly reduced the number of invoices entering aged receivables buckets. DSO started improving in the following quarter, with a measurable reduction of about 5-7 days over two reporting cycles.
What this reinforced for me is that DSO is rarely just a collections problem. It's often a data integrity problem upstream. Fix the root cause at invoice accuracy, and cash flow improves faster than most teams expect.
Mandate Valid Purchase Orders
Making a valid purchase order mandatory on every invoice removes guesswork for both sides. The PO number lets systems link the invoice to an approved order, which speeds up three-way matching. This cuts disputes about price, terms, and ship-to details before they even start. Invoices without a PO can be stopped early, instead of aging on hold with the customer.
Sales and customer teams can be trained to collect and verify PO data at order entry. Update billing rules so an invoice cannot post without a valid PO. Turn this rule on now and train teams this week to move cash faster.
Attach Proof of Delivery
Attaching proof of delivery to every invoice ends the common claim that goods never arrived. A signed delivery receipt or carrier handoff record shows date, time, and name, which builds trust. Many AP teams auto-validate invoices when a POD is present, so the clock to pay starts sooner. Links to carrier tracking or embedded images also cut back-and-forth emails.
This reduces short-pay and chargeback risk tied to missed paperwork. Configure your billing system to pull POD files from the carrier and attach them at send. Set this up now and ask your carriers to enable daily POD feeds.
Confirm Shipped Quantities with Buyers
Confirming quantities with the buyer before invoicing stops disputes about what was shipped versus what was ordered. A short email or portal prompt asking the buyer to approve shipped units creates a clear record. This step ensures the invoice reflects what the receiving team logged, not just what the packing slip said. When counts match in advance, AP can post the invoice without holds.
The practice also helps buyers plan accruals and avoid month-end surprises. Automate the prompt to send as soon as goods are received in the buyer’s system. Pilot this confirmation flow with one large buyer this month.
Standardize Item Names and Units
Clear, standard item names and units remove confusion that often delays payment. When both sides use the same SKU, description, and unit of measure, price-per-unit math becomes simple to match. This prevents disputes caused by cases billed as eaches or liters billed as gallons. Clean catalogs also cut duplicate items that trigger manual review in AP.
Aligning to shared barcode numbers further speeds matching rules. Map and clean product data with your top customers and lock the standards in contracts. Start a short data cleanup and publish a shared item guide to your buyers.
Launch Self-Service Dispute Portal
A self-service dispute portal lets buyers raise and resolve issues without waiting on email replies. They can choose a reason code, attach files, and see status, which brings order to a messy process. Standard forms capture the facts needed to fix the problem on the first try. Clear service levels and timestamps make aging visible, so teams act faster.
Dashboards show leaders where disputes spike, so root causes get fixed. Connect the portal to invoice and shipment data to prefill details and reduce typing. Launch a simple portal now and invite your top customers to start using it.