5 Big Financial Integration Mistakes and How to Avoid Them
Modern tools use integrations to eliminate rekeying data, share information across teams or departments, and gather intelligence to enable broader analysis and faster decisions. For most companies following a best-in-class technology strategy, the finance system is the hub for the other systems they use. It becomes a go-to point for making strategic decisions that affect the rest of the company. You can find out more about how Sage Intacct does this on our website Platform page.
As you consider how to connect other services to finance, consider these five big risks and best practices that can help you get the most out of your connections.
1. Login credentials that leave your system wide open
Connecting to your financial system of record and then reading and writing information is a big deal. It requires serious considerations around security. Robust systems like Sage Intacct require two levels of security to get into the system through the API. The first one belongs to the company making the request. These web services credentials get logged with every request and must be white listed with the receiving company.
The second set of credentials links the request to a web services user ID in the system. By linking to a web services user ID, in Sage Intacct’s case, API requests can be limited to the permissions associated with that user ID, just like you would limit permissions on a user who logged in through the screen interface. For example, an integration for Bill.com would only need access permissions to vendors, bills, and payment information. If the service is ever discontinued, the webservices user ID would be deactivated, securing the system.
Securing these credentials is another key consideration. Integration should partners know to keep credentials encrypted and stored where they can’t be accessed by a browser. If you are building your own integrations, your IT people need to do the same thing.
2. Missing the big picture by only seeing the money
Don’t risk incomplete insight by only looking at financial information. Often when we look at connecting to the financial system, we think of things that have financial data, like payroll systems or point of sale systems. Limiting the data you pull in limits your reporting power. Consider data from an HR system that lets you know about turnover, information from a hospitality system that lets you know number of rooms booked, or a software platform that reports customer usage based on quantity of data. Unlike other financial systems you might have used, Sage Intacct provides statistical (operational) accounts to capture this data for use in reporting, billing, or resource management.
Consider the example of a software company that charges subscription plus usage. Their integrated usage tracking software reports the usage, along with the customer that used it, to a Sage Intacct statistical account. The Sage Intacct contracts and subscription billing module uses this information to automatically add a usage line item to the customer’s monthly invoice.
3. Killing opportunities to work together
Don’t limit collaboration by making integrations only run one way. As a developer, I was often asked to just push information form one system to another. At first glance, this seemed like the easiest thing to do because it could be handled with a single API request. In actuality, it almost never meets the users’ needs, especially when the users don’t have full access to both systems. Creating two-way visibility creates opportunities to collaborate. For example, Sage Intacct’s built-in Salesforce integration doesn’t just create a sales order in Sage Intacct based on an opportunity in Salesforce. Sage Intacct reports back, creating and updating the sales order record in Salesforce. In fact, as the order gets fulfilled, billed, and paid, Sage Intacct continues to report the status back to Salesforce. Sales people have visibility into how the back office is interacting with their customer and can collaborate with the back office over Chatter, which is also built into the integration.
4. Clogging workflows and the GL with too much information
As you look at an integration, consider how much volume you will be processing and how much bandwidth you have to process it. If you are integrating with a financial system that is not multi-tenant, but merely hosted as a one-off implementation on a service, you may run into constraints. Multi-tenant or “true cloud” systems like Sage Intacct build in elasticity to handle broad fluctuations in data volume.
You will also need to consider how much data you actually want to bring in to your financial system and what to do with it. If you are doing high volume sales to consumers, do you want to store every customer record in your financial system of record, or does it make sense to keep those details in the point-of-sale system and let the finance system just handle summary transactions? A good financial system will provide extensibility in the form of custom data tables or objects that allow you to store much of this data in the system of record, while only passing summaries into the tables that feed into the general ledger.
One integration customer I worked with had more than 10,000 lines contributing to each monthly vendor bill, which would have created unwieldy documents when it was time to cut checks. Due to the connectivity to custom objects in Sage Intacct, they were able to capture and summarize the data before creating a bill. The system then ran and emailed custom reports that covered the details for each bill. A little planning gave them a fast, stable integration architecture to grow the business.
5. Forgetting to stay GAAP compliant and auditable
Can you trace report summaries to the transactions and back to their source? Sage Intacct makes this easy by creating clickable links inside reports, and then provide link fields to source records. When sharing information from Sage Intacct with another system, the API speeds up the process with built-in link fields for each record. Other systems also provide links to connect to their source records and using them is vital to staying auditable.
For example, when you integrate a point-of-sale system to finance, you want to have a way to easily click back to the point-of-sale record to verify information about the transaction. Getting back to source data creates transparency and keeps you GAAP compliant.
Experts at the ready
Of course, the best integrations are those that have already been built and tested. Sage Intacct’s Marketplace Partners, listed on the Sage Intacct Marketplace, have already built integrations that work for a variety of company configurations. This is always a good place to start, as they’ve also considered many of the details you need to handle when connecting to your financial system. You can find out more about what Sage Intacct does to help you integrate and extend your financials on our website Platform page.
A storyteller at heart, Bob Shawgo enjoys combining diverse, real-world examples with technical expertise to teach people how to create innovative business solutions that make their lives better. His more than 20-year professional background has spanned several industries and includes not only writing, promoting, and teaching about financial software, but also designing and building web-based financial applications. He began consulting with Sage Intacct in 2006 and joined them full time in 2009. His favorite part of working at Sage Intacct is hearing customers tell their stories of innovation, perseverance, and making a difference.