In the fast-paced world of business, the need for automated accounting, especially in AP and AR financing, has become more important than ever. However, this can be easier said than done. With so many finance and accounting software companies competing for your attention, how do you decide which one is best for your business?
Manual Processes: Why You Need Automated AP and AR Financing
When it comes to accounts payable (AP) and receivable (AR) finances, paperwork can pile up and become overwhelming. Additionally, manual payments, billing, and invoicing processes can result in complications through errors, delays, poor tracking, and a lack of scalability.
Human errors like typos, incorrect data entries, or calculation mistakes can create damaging results through payment discrepancies, inaccurate financial records, and reconciliation challenges. It can be time-consuming to fix these issues and can also create long-lasting problems for the business.
Manual processing requires processes to be done by hand, including printing, mailing, and delivery. Each one takes up time and can create delays in the payment cycle. This slows down overall workflow and can result in late payments and strained vendor relationships.
Keeping track of invoices, payment due dates, and approval statuses can be a struggle when you are dealing with hard copies. Without an electronic system with real-time visibility and tracking abilities, businesses may pay duplicate payments, have difficulty in identifying and resolving discrepancies, and have trouble maintaining accurate cash flow projections.
As a business grows, handling AP and AR finances manually can become overwhelming and inefficient, and with a higher volume of invoices, payments, and billing, the likelihood of manual errors only increases.
Integration Challenges for AP and AR Financing
Many small businesses opt to slowly add automation software, like AP and AR financing, as they need it. However, this creates a complex tech stack, which can present several issues that can impede business growth.
Integrating multiple systems and tools within a complex tech stack can become time-consuming as it requires verifying that the data transfer and communication processes between the different systems work. Any challenges in the integration can lead to data inconsistencies, delays, and increased maintenance. These issues take time to solve and slow down productivity.
A unified system eliminates the need to switch between different systems. This minimizes the amount of time it takes to navigate between tools and allows users to trust the data they have in their system, improving overall efficiency. The simplified workflow makes users’ jobs easier and more attainable.
Too many integrations, especially when they do not integrate seamlessly with each other, can result in data silos, where data is scattered across different systems and is not easily shareable. When this is the case, users are forced to switch between various systems, re-enter data manually, or rely on complex data transfer processes. This can make collaboration, decision-making, and otherwise efficient processes difficult.
Having all data within one system allows for more data consistency, eliminating data silos by providing a centralized database. This makes it easier to access, analyze, and report on data. Giving users real-time insights and reporting capabilities means they do not have to rush decisions after spending a large amount of time finding the data they need. It also allows them to make decisions with more confidence, knowing that the data they need is accurate and up to date.
Maintenance and Support
With a complex tech stack, businesses need to manage and maintain multiple systems. Each of these systems has their own updates, upgrades, patches, and support requirements. Keeping each system up to date and working properly can be a resource-intensive task, taking time away from other important areas and leading to longer resolution times and challenges in coordination efforts.
With a single system, keeping software up to date is a simpler process. It also reduces integration challenges, which make solving any system issues quick and pain-free. Working with a single vendor for support streamlines the support process and saves users time and energy.
Training and Onboarding
With a complex tech stack, it can be difficult to onboard new employees to the various systems. New employees must learn the base system as well the various integrated systems, understand their interactions, and know how to navigate between them. This increases the amount of training required for new employees and negatively impacts productivity.
With a simplified tech stack, users only need to learn one system, which simplifies the training and onboarding process and improves user experience.
Cost and Pricing
One of the biggest challenges for businesses when it comes to a complex tech stack is the price. Each integrated system has its own pricing structure, and companies can end up paying for overlapping tools. These varying costs add up, straining a company’s budget.
This becomes even more difficult as a company grows. Most software built for small businesses does not scale well, which means that the company will outgrow its capabilities while paying more for additional users.
Consolidating multiple systems can save a company money in both direct and hidden costs. With one pricing structure, the company can ensure that they are fully aware of all the costs included in the package, eliminating hidden fees. An added benefit is that one large software tends to scale more smoothly than a patchwork of small, integrated software.
Single-System Functionality with AP and AR Financing
The best solution to these issues is to simplify your tech stack to one or two systems that can handle your manual processes and integration challenges.
Take BILL as an example. As an automated payables and receivables platform, it is often integrated with QuickBooks, or even NetSuite, to cover the AP and AR financials that these accounting software tools don’t cover. For small businesses on QuickBooks, it can work, though not without its problems. For larger businesses, the integration challenges can become a serious issue.
The question is this: is there a financial software tool that can handle the functionalities of your current tech stack? The answer is yes.
Not all accounting software requires an outside system for AP and AR finances. Xledger, a leading cloud-based ERP system, includes all the capabilities of BILL’s AP and AR finances as well as dimension-based approval processes, drill down capabilities, PO matching, float time, and data ownership.
In addition to AP and AR finances, Xledger includes all the capabilities of an ERP software, including project accounting, PO management, multi-entity capabilities, and more. With locations in five different countries, Xledger serves more than 100,000 users in over 70 countries, including PwC and BDO.