The Importance of an Integrated Financial System

Work Smarter, Not Harder

Financial tasks are often complicated and time-consuming. Worse, founders and C-level executives tend to fixate on fundamental tasks, such as paying suppliers or tracking revenue. While, in contrast, they should be focusing on more high-level, strategic questions like:

• Are we profitable?
• If not, why not?
• Is investing in new equipment a good idea?
• Will we exceed our budget for this financial quarter?
• Why are our employee expenses running so high?

So, if these financial questions are so critical, why are leaders and decision-makers finding it difficult to devote the proper time and attention to them? One answer is that many companies lack an integrated financial system within their technical infrastructure.

Let’s review several key considerations for and benefits of implementing an integrated financial system within your organization.

Data Consistency

Without integrating the financial system across your company’s technical infrastructure, you can’t make the critical business decisions that drive your company forward. The reason? Business decisions are only as good as the data they are based upon. Most companies are making crucial decisions based on inaccurate, out-of-date, and irrelevant data.

Think about how many applications you use on a daily basis. For example, the data surrounding a single sales meeting with a client could spread across several software programs such as QuickBooks, Zoho, Slack, and Expensify. You may be aware that much of the data in these programs overlap. But what happens when that data is updated at different speeds in different applications? Suddenly you’re making decisions based on incorrect or incomplete information. That’s why, to ensure that data is consistent, you should integrate all your systems.

However, connecting all the data points is only the beginning of a winning financial strategy. You need to evaluate your financial processes, too.

Create a Robust Financial Workflow

There are several financial tasks involved in a company’s day-to-day operations — purchase orders, invoices, credit notes, travel expenses, and so on. However, very few businesses devise well-defined financial processes to ensure that every team member is on the same page and that financial data flows with uniformity.

By taking the time to outline a clear financial workflow and communicate it effectively to your team, you can reduce data errors and ensure that data dependent on manual actions, like submitting a travel expense claim, is consistent, regardless of which person submits the information.

Integrated financial systems can also speed up and automate your workflow. For instance, let’s say the process for expense submissions is to collect receipts, submit them to the accounts receivable department, and allocate them to client activities.

In an integrated and automated scenario, staff can upload their expense receipts to Expensify and have them pulled into QuickBooks for approval. The approved data is then sent to Zoho so that those expenses are attributed to the correct client in both your CRM system and invoicing software. With just one manual action, you can let a fully-integrated financial system do the rest.

Once you’ve established a robust financial workflow, you can start digging into the data that will shape your company’s future.

Data Reporting

Creating an integrated financial system has less value if you don’t utilize it to analyze your company’s most critical metrics. With accurate and frequent data reporting, you can start to dig deeper into the data and understand which processes are driving growth and which ones are draining your financial resources. By contrast, you can identify leads in a specific industry that require no upkeep, cost very little to acquire, and provide high recurring revenues — discoveries like these can transform a business’s fortunes.

There is a wide array of budgeting and analytical solutions available, and your choice will depend on the nature of your business. However, you need to ensure that the software you ultimately employ can analyze your data, create real-time dashboards, and run reports that answer the questions highlighted in the introduction.

Automate Trivial Financial Tasks

Spending too much time on trivial tasks like paying bills and chasing invoices can cost a company valuable time and even a competitive edge in situations where strategy drivers are focused on day-to-day operations. But bills do have to be paid. So what’s the solution? Automation.

Recent industry reports predict that automation will eliminate up to 40% of the transactional accounting work done today. By automating these manual tasks, you can free personnel to work on high-value tasks such as forecasting, analysis, and strategic planning, all of which stand to benefit from automation as well.

To make the decisions that drive forecasting, analysis, and strategic planning data has to be collected and collated from a myriad of sources that provide varying levels of structure and organization. Sources that export rich, structured data include POS, CRM, and ERP systems, while those that export unstructured data include social media platforms, website/app analytics, and connected devices. Collecting, collating, analyzing, and synthesizing such varied data is labor-intensive. An integrated financial system coupled with AI can sift through terabytes of data to identify patterns and deliver actionable financial and business insights.

While a company’s success ultimately depends on a host of factors and conditions, integrating your financial system is one concrete step you can take to give yourself a competitive edge.

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[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can view at your leisure, and each includes a comprehensive customer PowerPoint about the topic):

1. Property/Business Interruption and Cyber Liability
2. How to Build and Implement your Company’s Information Security Program
3. Introduction to EU General Data Protection Regulation: Planning, Implementation, and Compliance

This is an updated version of an article originally published on December 23, 2020.]

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