Technology & Innovation

Mastering SaaS finance tech stack integration

Metadata phrase: SaaS finance tech stack integration can take your operational efficiency to the next level. Read more on our blog.

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Why Integration is core to your Finance Tech Stack

To say that SaaS finance has many moving pieces is the understatement of the century.

Long-term financial success demands that your reporting, forecasting, billing, revenue recognition, and an array of other processes operate in tandem like clockwork.

If your SaaS finance tech stack lacks integration, that goal will forever elude you–especially as you scale your organization.

 In this post, we’ll be exploring:

  1. What tech stack integration is and why it’s so valuable in today’s business landscape,
  2. How you should approach the issue of integration
  3. Principles, tips, and best practices that can help you take full advantage of this tech stack strategy.

 Let’s get started.

Here’s what we’ll cover

Why should integration be part of your finance tech stack?

Integration methods: Pros and Cons

Automate rather than integrate

Tech stack integration risks

Lack of specificity

Limited integration options

Best practice for integration

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Why should integration be part of your finance tech stack?

Finance tech stack integration might sound complex or intimidating. However, it simply refers to connecting your company’s various software applications.

There are three distinct phases involved.

  1. Collect data from a source location
  2. Transform the data to prepare for target location
  3. Post that data to a new target location

Automating data flow (i.e. the three processes above) between the different parts of your finance tech stack results in:

  • slashing reporting lag,
  • opens the door to instantaneous SaaS forecasting,
  • eliminates revenue recognition inaccuracies,
  • and improves financial performance.

Integration is a must if you’re looking to build the gold-standard tech stack for SaaS finance. Let’s analyze a few common integration methods and their advantages and drawbacks.

Integration methods: Pros and Cons

Below are some methodologies that companies use to integrate their tech stack:

Importing and exporting files

This involves manually exporting files from one location and importing them into another.

It’s time-consuming, error-prone, and frankly just a step above manual data entry.

Dropping files on an SFTP site

This method still requires exporting files however, when properly deployed can eliminate the manual work associated with transforming the data and importing into a target.

Leveraging APIs through pre-built or custom connections

This method is often used by software publishers to create pre-built connections to other software applications through what are known as programming interfaces. 

In many instances, software publishers will offer these pre-built connections through their company’s marketplace

While usually cost effective, pre-built connections do not always support the data flows required.

Therefore, these programming interfaces (APIs) also allow businesses to tailor their integration to their specific needs. 

This requires having resources who are familiar with how to build and then manage these connections.

Adopting an integration platform

This method brings all the techniques described above together through a solution known as integration platform as a service (iPaaS). 

iPaaS is a cloud-based platform that enables businesses to build and manage integrations between their applications, typically taking advantage of a no-code,low code approach.

Like with all applications, there is a learning curve, but the benefits are measurable as all integrations can be created and supported through a common platform.

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Automate rather than integrate

When considering all your options, it is critical to ask “How can I turn tech stack integration into a strategic asset to strengthen my company’s operations?”

That’s where you want to change your mindset from simply moving data from Point A to Point B to automating data flows through by applying logic or intelligence to the information being collected before it is sent to its target.

This is the power of the last method described above – iPaaS.

When you bring iPaaS into the equation, data travels intelligently through the process.

It’s not a matter of pushing data between two locations; it’s a way to create a shared business consciousness at your company.

iPaaS is a superior route to integration because it:

  • Presents an opportunity to more easily combine financial, subscription, and operational data from across all your applications.
  • Enables integration across all your applications, and not just between your GL – many-to-many vs. hub and spoke.
  • Allows the application of business logic and mathematical operations to move data in a more informed and intelligent manner.

Tech stack integration risks

When companies pursue tech stack integration, potential risks need to be considered.

Integration is a pressing business issue, which can lead SaaS CFOs to jump into a decision about potential solutions too quickly.

In this case, the best way to go fast is to slow down.

Take a step back and look at things strategically. Otherwise, you’ll end up backtracking to fix mistakes, dragging out the process and making it more expensive than it needs to be.

What integration risks should you watch out for?

Lack of specificity

As with any business endeavor, it pays to start with the end in mind when integrating your tech stack.

Where do you want to end up when all is said and done?

Before pursuing an integration solution, define your outcome as specifically as possible.

What data are you collecting? Where should it end up?

Break it down into individual financial processes.

If you’re creating an invoice, what data do you need on it, and where will its eventual posting location be? Clarity is power.

It’s equally important for SaaS CFOs to set standards for success.

You need to define a point at which you can finally take a breath and say, “Alright, it looks good.” Knowing what that looks like in your unique case will help you stay focused and produce better results.

Limited integration options

As you build your tech stack, integration must be a top priority.

With each software tool you add, ask yourself, “How open is this piece of software to integrating with other solutions we use or plan to use?”

Successful integration requires some stage-setting.

Do not just take it for granted that you can integrate a given piece of software.

Now that you know more about what to avoid when tackling tech stack integration, here are two best practices we highly recommend.

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Best practice for integration

1. Take a holistic view of the challenge

We touched on it briefly earlier, but it can’t be emphasized enough: Don’t allow yourself to become myopic about integration.

It’s about so much more than moving data around your company.

What’s really at stake is your company’s ability to operate at its full potential.

When you automate rather than merely integrate, everything from your SaaS forecasting to your revenue recognition is streamlined and centralized.

That’s something you won’t get with a one-dimensional approach to the problem.

2. Document your solution architecture

To optimally integrate your finance tech stack, you should chart your company’s solution architecture in as much detail as possible.

Solution architecture might sound intimidating, but don’t fret. It’s just a visual representation of the flow of data throughout your organization. Your solution architecture has two primary layers:

  1. The systems that you use for reporting, forecasting, billing, and all the other financial operations at your company.
  2. The journey that your data takes as it travels between these locations.

If you deeply understand how and where data flows throughout your solution architecture, you’ll be much better positioned to integrate profitably in the long term.

Join us for the Modern SaaS Finance Forum

We’ve barely scratched the surface of SaaS finance tech stack integration.

If you want to learn even more, sign up for the Modern SaaS Finance Forum on June 5, 2024.

Hosted by Sage Intacct, this full-day digital summit has three different tracks for CFOs, Controllers, and RevOps managers at SaaS, AI, and high-tech organizations.

It’s a valuable opportunity to learn from and network with 2,000+ SaaS industry leaders, investors, and experts. Join us for this year’s event

Register your place today