Simplify spend management with accounting software integrations

Optimizing spend management with ERP and accounting software integrations

Effective spend management is critical for business growth. It streamlines finance operations, reduces errors, and automates manual tasks, providing clear visibility for better forecasting and budgeting. Though it might not top the list of exciting growth initiatives, its impact is undeniable.

Apart from helping prevent unnecessary spending with visibility and customizable controls, spend management ensures accuracy and organisation — two things you need to grow any business. Smart, connected spend management, including corporate cards and software, provides accurate data and overall financial visibility. It also should give you easy-to-manage processes for managing suppliers, employee reimbursements, and other business initiatives.

This post examines the integration of spend management with ERP & accounting software integrations, highlighting how this combination improves accounting practices. We'll also discuss when to consider changing your ERP system and how using Payhawk can seamlessly integrate with it, streamlining your financial processes for better business outcomes.

The importance of an integrated spend management system

For finance managers and CFOs, the challenge of managing expenses doesn't end with the finance department. It extends to instilling a culture of disciplined spending and value-driven decisions company-wide, especially crucial in the early stages of your business.

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

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 utilizing your ERP accounting software and expense management tools.

The challenges of disconnected systems in expense management

In today's fast-paced corporate environment, expense management represents a significant challenge, particularly when faced with disconnected systems.

Consider the implications of having to keep your eggs in multiple baskets:

The ripple effect of inefficiency

Disconnected expense management systems often mean data must be manually transferred between platforms. This not only introduces the potential for human error but also creates bottlenecks that can delay decision-making and financial reporting.

Increased error rates: Manual data entry is prone to errors, leading to inaccurate expense tracking and financial reporting. These inaccuracies affect the bottom line and can impact financial decisions.

Time-consuming processes: CFOs and finance teams find themselves mired in paperwork and manual reconciliation tasks, detracting from their ability to focus on strategic financial planning and analysis.

Lack of real-time insight: Without a unified view of expenses, finance leaders operate without the full picture, making it difficult to identify trends, manage budgets, or forecast.

Having disconnected data will cost you money

The inefficiencies borne from disconnected systems extend beyond mere frustration. They represent a tangible cost to businesses in terms of both time and money. The longer it takes to reconcile and report expenses, the greater the impact on operational efficiency and financial agility.

The modern corporate finance landscape demands a more integrated approach to expense management. One where data flows seamlessly between systems, automating much of the grunt work associated with expense tracking and reconciliation. This reduces the potential for errors and frees up valuable time for finance teams to engage in more meaningful, strategic work.

Harnessing the benefits of ERP integrations for enhanced spend management

Integrating your ERP with your expense management tool can give you various benefits. Here, we explore five:

1. Seamless workflow automation
2. Real-time financial oversight
3. Connected data
4. Streamlined expense reporting
5. Reduction in reporting errors

1. Seamless workflow automation

Integrating expense management with accounting software automates the once manual and error-prone data entry process. This will save your finance department precious time and significantly reduce the likelihood of errors.

At Payhawk, for example, we simplify the reconciliation process by automatically syncing expense data with your accounting software, ensuring that every entry is accurate and up-to-date. This means finance teams can dedicate more time to strategic tasks rather than being bogged down by manual corrections.

2. Real-time financial oversight

You can’t forecast and plan for the future without considering 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 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 whom. This allows for reactive spend management — including identifying patterns in spending and nip them in the bud before they become problematic.

3. Connected data

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.

Snap back to the reality of manual expense management: It takes over 15 minutes to correct an expense report. This means that your accountants will have to chase employees for missing information, receipts, and reimbursements. These tasks are already time-consuming, but as your business grows, the headache also worsens.

4. 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. It 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, reducing the risk of human errors.

5. Streamlined expense reporting

The end-of-month financial close becomes less of a headache with integrated systems. Our solution streamlines expense reporting, making it easier for finance teams to compile, review, and report financials. This efficiency simplifies the month-end process and enhances the accuracy of annual financial reporting.

When should you make a shift to a new 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) with 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 our solution 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, we can support you in whichever stage your business is at.

Making the strategic choice with Payhawk

Our expense management tool suits software scale-ups moving up to larger ERP. Whether you're considering a transition to a more sophisticated ERP system or looking to maximize the potential of your current platform, Payhawk offers a versatile solution. Its integration capabilities ensure that businesses can enjoy the benefits of advanced expense management and financial oversight, regardless of their ERP system's complexity or scale.

We also have integrations with the most popular ERP/accounting software choices, including (but not limited to):

1. Xero
2. Oracle NetSuite
3. Microsoft Dynamics
4. 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 integration?

• Real-time company spending information. The transaction is automatically pushed to Xero’s bank feed when your payment gets settled. 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 our solution. 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 we integrate with your current or future ERP, book a demo today.