Why you need a strategic alliance for your single source of truth.
The bar for a single source of truth (SSoT) is very high — we need it to be accurate, demand that it be comprehensive, and insist that it’s as up to date as possible. Any deficiencies create risks for both the finance team and others that depend on that source of truth for decision-making. Our reliance on the ERP to serve as the SSoT places a heavy burden on finance and accounting teams to meet these exacting standards.
One of the most challenging accounting areas for SSoT accuracy and timeliness has to do with a company’s spending. That’s because a constant stream of data and documentation emanates from employees in all corners of the organization, plus from a vast array of vendors. And they all use various channels and different formats to communicate information. Then there are further complications like capturing details for card spending, amortizations and subsidiary information for AP, and compliance and documentation for expense reimbursements to name just a few. It’s a lot of information to move from the field to the ERP. And this is what spend management software is designed to do.
Spend management is next-gen software that automates all of the workflows in the purchasing and payment process. A spend management platform like Airbase consolidates all elements of a transaction, from initial approval to final booking, for all types of spend (virtual card, physical card, expense reimbursements, and bill payments). It collects and organizes the following:
- Vendor records in a standard, organized format.
- Employee requests to make a purchase.
- Approvals based on rules that reflect expense policies specific to each purchaser and types or amounts of spending.
- Categorizations and tags for each type of spend: corporate card, bill payment, or reimbursement.
- Purchase order and invoice documentation, details, and matching.
- Payment settlement details.
- Receipts, W-9s, and other documentation.
A spend management system like Airbase consolidates all of this data and pushes it to the ERP, where it forms a complete and comprehensive SSoT with decision-ready data. And because the system captures that information as it happens, the SSoT can be updated regularly and frequently.
How consolidation de-risks the single source of truth.
Point solutions that update the GL with data on a narrow accounting function, such as bill payment software, increase the risk of duplication, incomplete data, and missed transactions within the ERP. Cross-platform reconciliations are required to manage these risks.
When the ERP depends on a disparate range of tools for one category like accounts payable, it’s difficult to get a complete view of, say, vendor-specific payment information or department-level spending because data transfers from each individual system can happen at different times. A spend management platform that consolidates all of a company’s spend acts as a source of transaction truth with comprehensive data accessible at any time across the company to all stakeholders.
When budget owners can track spending information in real time, they can stay on top of their budgets. Without that level of on-demand insight into spend, they’re left to impose on finance teams to produce ad hoc reports that often involve manual filtering and data consolidation. The ability for others outside of finance to create on-demand reports frees up time and can even lead to a cultural shift where budget owners play a more proactive role in adjusting their spend behaviors.
Why real-time data is a game-changer.
Modern platforms automate the collection of financial information from multiple sources in real time. That data is then available to sync directly to a general ledger more frequently than month-end.
It’s worth noting that not all tools sync data to the ERP the same way. For example, many transaction software tools require an interim step of generating a CSV file that gets uploaded to the ERP. A deep integration with the ERP, like Airbase’s integration with NetSuite, transfers that data directly and seamlessly. Perhaps equally important, this type of deep integration is two-way — the spend management system does not just push data to the ERP, it can access tools from that system too. A few good examples of this are the ability to pull amortization schedules and custom fields from NetSuite for use in Airbase.
Working with up-to-date financial information and an updated SSoT can also impact vendor relations and, in turn, cash flow. When a business doesn’t have full visibility into payment status, they run the risk of missing out on the best payment terms or mistiming a bill payment.
Audit readiness and the single source of truth.
In the event of an audit, accounting teams may be asked to produce an audit trail for every line in their financial statements. A spend management platform collects that information as the transactions take place, so every step of every purchase is found in the platform. Because the rules built into the spend management system are consistent with the company’s own expense policies, it’s the system that enforces compliance at the individual transaction level. This means that both the process and evidence of that compliance, which is available on demand, will always be consistent with the company’s policies.
Speed and accuracy of consolidated automation.
Manual reconciliations and data transfers via spreadsheets can both slow down the creation of the SSoT and introduce errors. Automated processes allow for the creation of a SSoT via the automatic consolidation of multiple sources of data. Plus, when processes are consolidated, compliance and accuracy are more streamlined since every transaction follows common procedures and standards.
As a reliable SSoT, your GL must be accurate, and it takes careful review and due diligence to fully consolidate all information. It must also reflect current financial activity, and financial information must be available to employees outside of finance for full visibility.
Airbase’s spend management platform forms a strategic alliance with your ERP so that it can better perform its role as a SSoT. Contact us to learn more.
Airbase offers a one platform solution to manage all non-payroll spend. It provides oversight and control over spending with real-time reporting and automatic syncing directly to your general ledger. Control all payments – physical cards, virtual cards, ACH, and checks – from one place. Close faster. Empower employees. Control spend.
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