The greatest value accountants can provide is ensuring accountability for all individuals directly responsible for every dollar entering or leaving their organization. Creating accountability is a monumental task that requires building multiple processes to track all decisions involving money movement, while keeping it simple enough for users to avoid feeling overburdened. Procure-to-pay (P2P) software companies are automating Guided Procurement, Accounts Payable, and Expense Reports to alleviate much of the burden associated with accountability.
However, how can an accountant tell if the P2P software is actually working as intended? How can P2P software companies provide all the information their customers need to confidently articulate their organization's financial story? How easy is it for them to piece that story together today?
For every decision made in a P2P software, accountants create a parallel record to independently track those decisions. These records, called ledger entries, are recorded in an accounting ERP system like NetSuite. A robust Close Experience process ensures all entries are created and recorded accurately, allowing customers to confidently "close" their financial books.
Accountants typically update stakeholders monthly, and due to the tedious and stressful nature of managing entries, they run the Close Experience process just once a month. Now, imagine trying to make sense of thousands of transactions, entries, decisions, and categorizations in just a few days. It's no surprise that accountants using P2P software often feel overwhelmed and extremely stressed at month's end.
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Accountants don't want to waste their valuable time sifting through numbers to verify proper recording. Instead, they need to focus on crafting the right financial story to guide their company in the right direction.
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P2P software's greatest value arguably lies in empowering CFO teams—regardless of size—to build complex processes and handle increasing transaction volumes while significantly reducing overhead. This strength, however, also presents its biggest challenge.
While accounting processes are generally structured, a significant portion remains open to interpretation. As such, customers need flexibility in determining what to record, as well as when, where, and how to record it. Helping customers define and manage these rules and processes presents a formidable design and infrastructure challenge, especially considering the need for consistency with their respective accounting ERP systems.
A crucial feature of ledger systems like NetSuite is their immutability—once an entry is recorded, it can't be undone. This allows accountants to confidently assert that no one can alter the record after the fact. Now, imagine mistakenly recording thousands of entries in a month because the customer had no way to review them beforehand. That's not just a headache—it's a full-blown accounting nightmare! 🤯
To avoid such nightmares, accountants need to have the visibility on and ability to modify the details of all the entries up until it is recorded in their ledger system. Before an entry is synced, it can go through many review stages and modifications by multiple users. How can we enable an accountant know who has modified those entries, why and when without overwhelming them?
From an accountant's perspective, what's the point of having an incredibly sophisticated P2P software with all the right controls and a beautiful design if they need to spend more time at month-end manually recording information and hoping not to make mistakes? After all, accountants are ultimately judged by the accuracy and clarity of their accounting books!
There are two major challenges with accounting ERP integrations:
There are multiple ERPs with vastly different integration capabilities
Every product initiative involving ledger entries requires multiple considerations to determine which accounting ERP systems can be supported. Consequently, a single feature may necessitate multiple versions of design, engineering solutions, and go-to-market strategies.
ERPs struggle to keep pace with modern P2P software
None of the major accounting ERPs today were designed to sync thousands of entries simultaneously, each with multiple data points. As a result, we often encounter syncing timeouts and errors.
As a result, accounting ERP integrations often become a significant hurdle for many procure-to-pay product initiatives.
To ensure all entries are recorded accurately, accountants perform a two-way matching process between source data and entry data. This process, called reconciliation, is typically done at least once a month by most companies before closing their accounting books. Bank reconciliation is the most crucial form of this process, where customers match individual entries with bank statements to account for every cent. This meticulous matching ensures complete financial accuracy.
As payment is at the heart of procure-to-pay, accountants invariably look for a robust bank reconciliation process. This process should start with an immutable bank-like balance, providing detailed statements and an easy way to match entries with specific transactions. Top-tier P2P companies will go a step further by performing the reconciliation on behalf of the customer.
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We are former CPAs and Controllers, and a full-stack product team that consistently solved one of the top three organizational priorities for the last few years at Airbase—one of the leading procure-to-pay companies.
We can serve as a SWAT team to build product strategy, create go-to-market plans, and advise on design and implementation solutions. Alternatively, we can build your product from the ground up!
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