There are many articles written about this. It’s a common issue that small, medium-sized and large enterprises face somewhere down the road. Since in business, the general ledger might be the most important document of all, it’s important to have it compatible with your financial software. If they do not work with one another, your accountants will have a much harder time trying to make things work. To make your financial operations easier, we will give a rundown of the largest obstacles that most organisations face when integrating their GL with any financial accounting system.
Data import and export problems
Since the general ledger is comprised of all relevant and important financial data, the accounting system has to be capable of handling various formats and sources of information.
Your G/L consists of many different points, rows and calculations with a lot of variables that require summarisation, integration and fluidity in terms of being able to manipulate and use that data later on. Far from all accounting systems are ready to accept and integrate different format files. For the most part, G/L integration can take a very long time or outright fail because the accounting software isn’t capable to read Excel files or other data from your ERP system, for example.
On the other hand, export also becomes an issue. This is also because of the very same reasons. Not all software is prepared to handle and convert files, parameters, generate reports that could be used in presentations or other areas.
Thus, you should seek a system that is compatible with as many unique configurations, as possible.
Restrictions from your accounting software
This issue is quite common for non-profit organisations that seek to integrate their general ledger. Some software types aren’t able to handle specific configurations. For example, the CRM could lack a subledger that holds important data which would, otherwise, need duplication and manual inputting over and over again into the accounting system. The system needs to be able to do data and information “translations” on its own.
If it imposes certain restrictions on data which can or cannot be imported, it makes it really difficult to seamlessly integrate the ledger.
Systems lacking the capacity to “communicate” between each other
There are numerous cases and real examples of needing to make changes to your financial records at the last moment. These changes could be expected or unexpected. With the so-called downstream changes, alteration of financial records in the G/L means that your accounting system should be able to override any inaccuracies or inconsistencies, provided by any editor of the ledger.
If the accounting system and the G/L communicate, then any illogical or inaccurate alterations won’t be allowed. For example, a financing deal fell through and it faced some setbacks that delayed funding until the next quarter. However, the department of IT doesn’t know that and files a purchase of 50 new laptops. The director of purchases could see this request and go on with the task without being notified about the change in plans due to the lack of financing. Thus, a huge hole in the budget could appear and the purchase might need to be reversed, goods returned and there are a whole lot of different manual tasks that accountants and responsible execs will now have to do in order to fix things.
Now this is just one example
Absence of centralisation in the accounting system
The G/L is the most centralised financial document that there is. It consists of the most important information regarding financial disclosures, sensitive payroll information, CRM data and so much more. However, some accounting systems are not set up and built to handle every piece of information it receives.
The General Ledger needs to be compatible in order to allow accountants to generate detailed reports and insightful data after each week, month, quarter or financial year. More advanced systems are capable of making the transactions at the end of any period (due date transactions) to simplify and automate a lot of the labour-intensive processes that cause delays and setbacks for accountants.
If the accounting system of choice has the right features, you can easily integrate it with the general ledger, meaning that a lot of the tasks will be automated and processes can be monitored and adjusted from the source which every responsible employee can access.
Conclusions and advice
There are very specific obstacles that businesses can face when trying to integrate their general ledger with a financial accounting system. In short, not all systems are equal and every single business needs to find the right software for their operations. Being able to integrate and import a lot of data (as well as export it) is a must-have feature. In addition, your systems should be able to communicate with one-another, meaning that your organisation can avoid costly mistakes and accidental expenditures.
Finally, the solutions need to offer centralisation. If you are able to automate the generation of reports, you can definitely reduce financial and money expenditures towards accounting and related areas.
Our advice for all businesses would be to try and remain patient while integrating the G/L with new software. Choose a compatible and highly functional software solution so you know, in advance, that your data is in safe hands and you are less likely to face bumps along the road. Next, make sure to consult with the software developer and allow them to aid you and your staff through certain processes. Once you get it right, you can make the most of any software. Finally, don’t forget to have responsible and qualified people on-board. The software needs to be able to communicate and the information exchange between platforms needs to happen in a way that suits every department and every party involved. Terms need to be clear, data flow and responsibility tracking shouldn’t be confusing as well.