Simplify spend management with accounting software integrations

Effective spend management can catalyse business growth by helping you maximise value while reducing costs. It makes the finance arm of your business more efficient by reducing human error, automating time-intensive manual processes, and giving clear spend visibility to influence forecasting and budgeting.

Spend management might not be the most desirable activity on your to-do list among your other growth initiatives, but its impact is powerful when done correctly.

This blog discusses how, together with your ERP accounting software, spend management tactics can work to achieve better accounting. It also details when you should consider changing your ERP system and how Payhawk integrates with it.

The importance of spend management systems

Apart from helping prevent unnecessary spending with visibility and customisable controls, spend management ensures accuracy and organisation — two things you need to grow any business. Smart, connected spend management, including company cards and software, gives you accurate data, providing overall visibility when it comes to your finances. It also should give you easy-to-manage processes when it comes to managing supplier relationships, employee reimbursements, and all other business initiatives.

Streamlined, all-in-one spend management should also offer proactive and reactive controls over different spend types, which are highly customisable and ensure the accountability of approvers.

As a finance manager or CFO, no doubt, you’ll immediately think of the finance department when it comes to spend management. And, although you/ they certainly have the most significant role to play, everybody in the organisation should be accountable for their part in spending.

Without everyone working together, spend management won’t work. You need to ensure a good culture of discipline and spending for value, particularly in the infancy of your business.

43% of finance professionals still manage expense reporting manually. If you’re one of them you know that you can’t do this as you scale your business — you need real-time visibility into your business finances to make important decisions and forecast for the future. And the best way to do that is by correctly utilising your ERP accounting software and expense management tools.

Improving spend management with ERP integrations

Integrating your ERP with your expense management tool can give you various benefits —here, we explore three — real-time visibility into company spend, connected data and error reduction.

Real-time visibility into company spend

You can’t forecast and plan for the future without visibility into company spending. And we’re not just talking about small windows of visibility when the credit card statement appears at the end of the month — your finance team needs real-time visibility throughout the month.

Integrating a spend management tool with your ERP software gives you this instant visibility around spending. You can view real-time data and see where money is being spent, what it’s being spent on, and by who. This allows for reactive spend management — including identifying patterns in spending and nip them in the bud before they become problematic.

Integration between your ERP and expense management tool means each tool reflects the same numbers — watch as data from payments and invoices are synced automatically with your ERP system and matched with corresponding categories. This is clever accounting.

Connected data

Finance teams currently rely on employees to report expenses correctly, and when they don’t, it costs finance teams valuable time. It takes over 15 minutes to correct an expense report. They have to chase employees for missing information, and this task in itself is already time-consuming, but as your business grows, the headache gets worse.

Integrating your ERP and spend management tools means you can leave this problem in the past. Automatic data reconciliation is a must have for any finance team, and Payhawk makes reconciliation effortless.

Reduction in errors when reporting on financials

You must match charges correctly when completing your accounting. But, as we know, manual reporting is prone to errors — we’re human. But there’s no room for discrepancies in financial reporting, you need to be confident in the figures you’re reporting, and that’s why software that syncs automatically, and matches your charges instantly, is a time saver for everyone involved.

You can further reduce the need for manual input with Optical Character Recognition (OCR) technology helping you automate data entry, which also reduces the risk of human errors.

As a business grows, transaction volumes inevitably increase — that’s why automation like this becomes especially important. Automation means finance teams can prioritise add-value activities rather than fixing data entry issues. Many businesses won’t just use an ERP integration for accounting. They will use it as a PO system, for stock management, and other initiatives. Here, it’s important for businesses to onboard an ERP as soon as they can, in order to avoid a process that will become increasingly complex.

When should you change your ERP system?

Knowing which software can support you best as you scale up is tricky, so why would you consider changing your ERP system?

You can highly customise an ERP system to your business needs. However, if you’re still dabbling with accounting software like QuickBooks or Xero, you might find you need better consolidation, especially if you’re still relying on excel to consolidate your entities away from your accounting software. Consolidation you can get from products including Microsoft Dynamics and Oracle NetSuite for enterprise accounting.

What you need as your business grows and changes, particularly in the early stages of growth, is to understand what options are available to you in the marketplace, what they offer and why some are better than others.

In short, you might want to consider changing your ERP if:

• Your finance function changes
• You need more governance and control
• Or you now have multiple legal entities

Read more about each below.

If your finance function changes

As your business grows, things change, including your organisational structure and day-to-day operations. Change is good — it keeps businesses flexible and reactive.

But as you grow from, let’s say, 100 employees to over 1,000, your finance department’s functions will change, too. You might realise you need a comprehensive group finance function and a group treasury function too. This is something you need to plan for.

If you’re on the cusp of a period of rapid growth, perhaps after receiving Series A or B funding, this is when you graduate to a proper ERP system to manage all your accounting needs competently.

For more governance and control

For example, you might consider moving from Xero to NetSuite because you need more governance and control. Governance can no longer be an afterthought — non-compliance can lead to sticky situations.

If you’re getting very big, you might find yourself seeking a purchase order system, which is what bigger ERPs can give customers automatically. They allow you to create the centralised group finance function (and treasury function if necessary) more centralisation and better efficiencies.

Because you have multiple legal entities

Suppose you’re currently using software such as Xero. In that case, it can become a challenge when you’ve got three to five legal entities — you’ll notice a consolidation problem because Xero doesn’t allow you to deliver consolidated accounts.

On the other hand, NetSuite will consolidate all legal entities, and although they’ll still remain split, they’ll be consolidated, which saves valuable time for your finance teams.

Why organisations don’t change ERP systems

The most obvious reason businesses don’t change ERP is down to cost. There’s a big difference between paying for NetSuite and Xero. And the great thing is, you don’t necessarily have to change ERPs to get the most out of Payhawk.

Smaller systems like Xero and QuickBooks are great. Xero, in particular, is a fantastic accounting system, allowing you to bolt things on, like Payhawk. Bolting Payhawk onto your Xero software adds scale. Without changing ERPs, it enables you to run quite a large business, including its AP, cards, and reimbursable expenses at high translation volumes.

This means you can continue using your original software for longer, which is particularly helpful if you’re going through a period of change as an organisation.

So, whether you’re ready to switch ERP systems or you’re happy sticking with the same one, Payhawk can support you in whichever stage your business is at.

How does Payhawk fit in?

Our expense management tool suits software scale-ups moving up to larger ERP. We offer a good, scalable solution, integrating into some of the most popular ERP/accounting software, including Xero, Oracle NetSuite, Microsoft Dynamics and QuickBooks.

We deliver a join-up accounting and spending management experience for our customers, and to give you an idea of how they integrate — we’ve given you a top-level view of our Xero and NetSuite integrations below.

Xero and Payhawk integration

With over three million subscribers, Xero is one of the most popular online accounting software on the market. So, if you’re already a Xero customer (or are thinking of becoming one), what can you expect from our Payhawk integration?

• Real-time company spending information. When your payment gets settled, the transaction is automatically pushed to Xero’s bank feed. This means your balances won’t ever be out of sync, giving you real-time monitoring and control of your spending
• The integration means your invoices will be automatically categorised in the appropriate Xero chart of account and Tax Rate
• One-click reconciliation

NetSuite and Payhawk integration

When we launched our direct integration with Oracle NetSuite in Summer 2022, we were the only European spend-management solution with a direct integration for Enterprise businesses.
Our integration with NetSuite gives our customers:

• A quicker and less stressful month-end process as reconciliation within the ERP can happen continuously throughout the month as spend data is uploaded from Payhawk. No more bulk reconciliation at month-end
• Eliminates manual data uploads
• An automatic and real-time data transfer to Oracle NetSuite for Enterprise Accounting (including all invoice and receipt fields), enabling real-time reporting and analytics on spend

If you’re interested to learn how Payhawk integrates with other ERP systems, book a demo.