Hidden traps while integrating invoice automation to your financial system
When considering an AP/AR automation solution, one of the most often overlooked but critical consideration is integrating properly to your existing finance, accounting, and ERP systems. Poor designs could end up with reconciliation conflicts and data/payment errors, wasting precious resources and time to resolve them – these are all avoidable with careful planning.
While questions like “Do you integrate with my accounting package?”, “How long does it take?”, “How much does it cost?” are intuitive, the equally important questions such as “What is your integration approach?”, “What is the delay between data synchronization?”, “Is the integration two-way or one-way?”, “How do you handle conflicts?” are often not asked.
Your invoice automation system does not exist in a vacuum, nor is it the system of record in most cases, it is symbiotic to other temporal data sources in your company – data that changes over time. Infrequent batch synchronization in a busy enterprise, while easy to implement, can lead to conflict amongst multiple versions of truth – while all true, are from different points in time. This type of conflict is very difficult to pinpoint especially in a complex system unless every change and transaction record is timestamped – which is not always possible or readily available, especially if you have older legacy systems that are no longer actively maintained because the creators have retired. It would necessitate a large group of subject matter experts to review the history and process flow, debate what the proper update sequence should be, and manually backout changes and rerun the update to correct the record. This is VERY time consuming, and requires some of your best and most senior resources to accomplish. It is not the best use of critical resources in any enterprises. The magnitude of this conflict is directly linked to the delay, hence whether you synchronize every few minutes, every day, or every month – truly matters!
Another consideration is the type of integration, is it a one-way broadcast, or a two-way synchronization? For invoice automation, it needs to be bi-directional in most cases. For example, the purchase order matched against an incoming invoice may come from your ERP, but if there is a dispute that leads to a correction, this must be pushed back into your ERP to reflect the changes.
Lastly is the flexibility. Is it hard-coded into your invoice platform, and only supporting specific ERP or accounting packages? Don’t forget, integration are always version specific, you don’t want to be in a situation where the invoice automation platform forces you to upgrade your ERP! This is particularly acute for companies with highly customized ERPs that have fallen behind in upgrades. A proper invoice automation solution should allow you to integrate into a variety of platforms by exposing the integration points? The more flexible it is, the more freedom you have in upgrading or changing your financial platforms.
Take all these factors into consideration while choosing a new or maintaining your existing invoice automation platform, it will help you to avoid a lot of hidden pitfalls in the future.