Does Your ‘Tech Stack’ Stack Up?
Integrations Customize Cloud-Based Accounting Platforms
Accounting technology has advanced significantly in recent years, with artificial intelligence (AI) and cloud-based solutions dominating the landscape today. Forward-thinking business owners can ensure that their accounting and financial reporting yields as much actionable data as possible by evaluating their accounting technology to ensure it is keeping pace with their needs.
The ‘Tech Stack’
Is your tech stack able to produce the real-time data you need based on your business’ volume, complexity and sales pace?
A ‘tech stack’ is the configuration of technology solutions and integrations that your finance department or outsourced accounting provider uses to manage your accounting and financial reporting. The ideal tech stack for your company may be different from that of other companies.
With increasingly more businesses using accounting applications like QuickBooks Online, Intacct and Xero, all of which are available with many integrated apps that provide specialized functions, a customized configuration of accounting technology capabilities is key to getting the most out of your system.
Now is a good time to evaluate your tech stack to make sure it is aligned with your needs. Because of many changes brought about by the COVID-19 crisis, the movement to a paperless world has been accelerated and new technologies have gained traction. Historically, technology-based accounting systems have not evolved as quickly as they have recently. But now, the movement to cloud-based platforms is universal. The technology platforms and integrations you looked at five years ago are much more powerful than they were then. Most businesses should re-evaluate their tech stacks at least every five years, but if you’re in a fast-growth mode, do it every two to three years.
Assessing Your Needs
What makes a good tech stack for your business? Volume, complexity and dollars are the drivers.
Generally, inventory management is a significant differentiating factor for businesses seeking to build an integrated platform that is tailored to their needs. If you’re moving physical goods around it’s important to know how many items you have and where they are. So, for sales and service companies, volume and complexity may require automated bill pay applications and a credit card application.
For restaurants, size matters. If a single owner owns 10 restaurants and can’t be in every location every day, inventory and use rates should be tracked. How much liquor is on hand at each location and is there a location where it is being used faster than normal, indicating a problem?
As your business grows and changes, your accounting technology needs will change, too, and should be re-evaluated regularly by your internal finance staff or your outsourced accounting service provider. In some cases, upgrading cloud-based accounting applications can help leverage the staff or level of outsourced accounting services you already have, making the job of financial reporting more manageable.
For businesses that use QuickBooks Online as their cloud-based accounting platform, typical integrations include:
- ReceiptBank for A/P
- Bill.com for A/R and/or A/R
- Expensify for credit card management
- Fathom for consolidated financial reporting
- QVinci for financial reporting
- Jirav for budgeting and forecasting
- Fishbowl for inventory management
Many companies also use Sage Intacct for their accounting platform, which has more built-in functionality, requiring fewer external integrations, but which integrates well with Bill.com. For farms and other agriculture-based businesses, Xero is the platform that integrates with Figured, the leading application for farm management.
The COVID-19 crisis has presented challenges around internal controls for many companies, with normal processes disrupted and, in some cases, incoming and outgoing payments being handled by more staff than normal.
For owners who want more transparency, automation and cloud-based finance technology can provide account linkage and a process trail that provide reassurance.
If you have questions about whether your existing tech stack is aligned with your business’ needs, contact your Adams Brown advisor.