26 September, 2019

How to Integrate your Platform with Accounting System

How the integration works and what can bring to the enterprise

Currently, there are a large number of types of accounting. There are accounting, management, financial, tax, operational, production accounting. At the same time, management accounting itself can also be carried out in parallel according to several standards. For example, a company that is part of a large holding compiles one management report for the parent company, and others for its internal purposes, and, unfortunately, these two types of management reporting are so different that it is not possible to simply transform some management data into others; two kinds of management accounting.

Based on this, one can imagine what kind of staff and what workload of personnel for the parallel management of various types of accounts and the preparation of multiple reports should be in the company, if not strive to integrate all kinds of accounting in a single integrated accounting system. Indeed, in fact, all these accounts reflect in different ways the same primary information. Therefore, it would be logical to strive to ensure that the necessary information on business transactions is indicated by one specialist once and in one information system as essential for all accounting systems maintained by the company, and falls into the appropriate reporting forms.

Integrating your accounting software can help keep your customer support, sales, and finance departments in sync. It will minimize problems between these various aspects of your business. Many companies make the mistake of separating their accounting, marketing, and client services from each other using segmented software tools. Important information is stored in one department when it can benefit another and have a positive impact on the business as a whole. And this is not to mention the manual entry of data between systems, which often leads to errors and discrepancies in the data. And it cannot be too late to change anything.

Minimizing this “information bottleneck” will improve your business with the speed and accuracy of information. Integration with your accounting application will simplify this information flow. You will get a clearer picture of what is really going on in your business, and you will make decisions based on that clearer and more accurate view. You can use integration solutions to maximize efficiency by doing things like automating invoice creation, synchronizing customer records, and managing sales commissions.

Accounting and management integration

Let's take a closer look at the features of the integration of accounting and management accounting in a single accounting system. So, the integration process can be divided into two critical levels:

  • inclusion at the level of methodology and accounting technology
  • automation integration.

accounting automation tools

Integration at the level of methodology and accounting technology

As a rule, at the time of setting up management accounting, the company already has a working accounting system with a developed methodology and accounting technique, which are based on various legislative acts and are fixed in the Accounting policy, job descriptions and various regulatory documents of the company.

For the purpose of management accounting, the company also develops the management accounting policy of the company. Management accounting policy includes methodological and organizational-technical sections.

In the methodical section:

  • asset valuation methods are selected to draw up a management balance sheet;
  • the methodology of cost accounting and costing of production costs is determined;
  • the method for preparing information for groups of management decisions is determined;
  • a list of registers and management accounting analysts are being developed — a management chart of accounts;
  • management reporting formats are being developed;
  • a list of business transactions possible in the company is being developed.

In the organizational-technical section: * the organizational structures of management accounting services are determined; * prescribes the financial structure of the organization for budget management, based on fiscal responsibility centers; * workflow standards are being developed; * the accounting technique and new requirements for the efficiency of primary processing information are being developed to obtain the necessary management information with the given efficiency, frequency, and in the necessary analytical sections.

Management accounting policies can be developed based on legislation or any other user standard. At the same time, determining the methodological aspects of management accounting, you need to understand how much they will coincide with the accounting methodology in the company. Will the methods for evaluating company property, arrangements for dividing assets into current and non-current, methods for writing off the value of fixed assets, methods for accounting for income, cost classification and methods for accounting for costs and writing them off to financial results coincide in these systems.

Thus, already at the methodology level, an analysis is made of what information can be directly taken from the accounting system - the methodological integration of accounting and management accounting systems.

Automation Integration

After the developed methodology of the accounting system, after designing “on paper,” the next stage begins - the step of introducing an automated system of accounting and management accounting. At the moment, accounting in companies, as a rule, is already automated. Therefore, when choosing a software product for the automation of management accounting, companies often rely on existing software.

There are several options for integrating management and accounting, depending on how business transactions are reflected in an integrated accounting system:

  • Simultaneous reflection of business operations in various accounting loops from a document entered into the system.
  • Transformation according to specific rules of data entered into the primary circuit and other accounting contours.

In the case when the company has a primary management contour, the following integration options with accounting are possible:

  • integrated system with management and accounting contour (primary management);
  • integrated system with additional copying and removal of the accounting circuit.

In this case, each business unit makes its own decision. Yes, of course, you can buy ready-made solutions, configure and configure them individually. But you can also develop your own platforms for the integrated work of the enterprise as a whole. But making such a decision, you need to understand how possible the connection of the enterprise with third-party services and platforms is, as a rule, such an option minimizes costs at times, optimizes them and the entire work of departments and the enterprise as a whole, and it is available mainly with individual non-standard solutions and platforms, tailored to individual needs.

Risks and Rewards

accounting automation software

The integration of accounting systems provides the following several advantages:

  • The exception of double (triple and so on) data entry on business transactions for the needs of various accounting systems.
  • A high level of reliability of management information achieved through single data entry and by minimizing the likelihood of error during repeated processing of the same information in different accounting systems.
  • Comparability and compliance of data of various accounting systems based on the use of a single information space.
  • Lack of need for the maintenance of additional services for the parallel maintenance of various types of accounting.
  • Workflow optimization in the company.

In addition to a number of such advantages, there are also risks of using automated solutions:

  • To obtain the services of a remote server, a constant connection to the Internet is necessary, in context with which there may be problems with the correct and timely updating of information in data warehouses, that is, the issue of data integrity becomes actual.
  • Despite the reduction in costs associated with technical support of the software, the user has limitations in the software used and sometimes is not able to fully customize it for his own purposes, this may be due to the fact that the system with which you want to integrate is entirely closed, the documentation does not correspond to the validity, and the support service does not understand how their system works.

Get rid of the routine with Amoniac's solutions and full support

If, for example, you already have any business, this does not always mean that it works perfectly and you absolutely do not need optimization.

Think about it!

If your thoughts have long been far away and want to move the business further, and you are cluttered with daily work, then this can be solved by a number of optimization and integration solutions.

As an example, one of our recent developments is the Supplier Portal for the Swedish company ComBuyIt. The developed platform connects to end suppliers and retailers of gift cards via API or e-mail and allows you to process orders very quickly. A platform for the online store, working on the model of dropshipping, which automatically generates invoices and credit notes for the ordered products.

More about the project could be found here https://amoniac.eu/works/supplier-portal

Summary

Do not forget about the main thing... Methods of automation of management accounting largely depend on the characteristics of the business, the established management traditions, and strategic goals of the company. However, you need to understand that management accounting is not a goal, but a means of supporting decision-making. Therefore, as a result of such accounting, clear and truthful financial and economic indicators should be obtained, based on which the enterprise management can effectively manage it. And finally, the cost of introducing new management accounting methods should not exceed the benefits of their use.

So, if you already have automation ideas or thinking about any improvements, you can contact our developers any time at hello@amoniac.eu or +372 5770 7573.

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