For some of your business clients, the year-end closing process will be a mere formality, taking just one or two days. Others will struggle and take weeks.
When data is dispersed across multiple applications, accountants at all levels spend long hours and weekends doing manual entry, which can come at tremendous costs. It can also lead to errors, delays and internal control breakdowns.
Manual activities are demotivating to accounting professionals, who become data-entry robots. They cannot spend time on reporting, analysis and other high-value activities they were trained for and would rather do. The key to faster closing is to review your processes and automate as much as you can.
In an era where companies adopt dozens, if not hundreds, of different cloud applications to solve all kinds of business problems, accounting teams find themselves sifting through a variety of stand-alone data silos. Repeatable processes that span multiple applications are ripe for automation via integration.
While fluid information sharing is a critical operational building block in organizations of all sizes, many accounting departments are unable to afford the dedicated technical resources it takes to integrate data between these applications. This is where integration Platforms-as-a-Service (iPaaS) can shine.
The right iPaaS alleviates many of the technical challenges around integration so accounting teams can focus on building the right processes that work for them. As a whole, iPaaS is a suite of cloud services that enables the development, execution and governance of integration flows connecting any combination of on-premises and cloud-based processes, services, applications and data within individual or across multiple organizations.
The platform takes care of critical functionalities, such as guaranteed data delivery out of the box, while providing an easier user interface that helps accelerate how data is connected throughout an organization. An example of a leveraging integration to create operation excellence and faster closes is the way it can streamline lead-to-cash and procure-to-pay processes.
iPaaS: Lead to Cash
Companies typically use a CRM system to manage their sales pipelines, which means as soon as an order is booked, the information needs to be entered into a billing or financial application. Accounting then prepares the invoices and bills the customer. When payment is received for the invoice, it needs to be matched against the open invoice and the correct accounting entries updated.
This process usually spans two or more applications and provides an ideal scenario where integration can be key to automating the entire process. By leveraging an iPaaS, as soon as an order is won in the CRM, the information is automatically sent to the billing app. Once customer payment is received, integration between banks or payment gateways and the billing app can automate the invoice matching process.
Specific business rules can be created to define matching criteria. Integration in this scenario not only results in faster billing and timely payments, but also automates processes that can take hours of manual effort, especially during closing periods.
iPaaS: Procure to Pay
Procurement is another area that can easily span across three or more applications.
Companies either use a vendor portal to capture information or manually enter the vendor into an accounting or ERP system. The vendor contract and W-9 forms are collected and physically filed or stored digitally. When requisition requests are received — either via email or vendor portal — accounting creates a purchase order, which is sent to the vendor. Payments are then disbursed to the vendor based on the terms.
It is important to make sure accurate information is entered into the system, such as the vendor’s banking information. By integrating the system, which captures vendor information, to a database of all US Bank’s ABA routing numbers, timely and accurate payments are ensured. Integration can help automatically apply business rules, such as required legal documents based on a company type (e.g., W-9 for sole proprietorship).
To completely automate the payment processes, integrating the financial system of record with a vendor management application along with integrations with banks can make sure A/P processes are streamlined and automated. If items are taxable, integrations with tax calculators will ensure the correct amounts are captured in the PO and in financial reports.
Finding Opportunities for Automation
Jotham Ty, Founder of CEO of Gappify, suggests looking downstream for manual processes to identify opportunities for automation, especially where there is manual data entry or where spreadsheets are used to track the data — data mapping, field validation and data conversion are examples. Companies wanting to close the books faster need to streamline their processes by closing the gaps between applications.
To do so, accountants should consider iPaaS technologies for them and their clients to process the data they need for timely book closing.