The role of API and ERP integrations in Treasury Management

A recent Treasury Technology guide from Treasury Dragons found that automation of treasury tasks remains a top priority for most treasurers. Forecasting and visibility of cash came second, increasing from 26% to 58% from 2022 to 2023. The need for better automation and visibility arises from the grim reality treasurers still experience nowadays - manually managing multiple systems and institutions with fragmented cash flow visibility.

API connections with ERPs, banking systems and financial operations platforms have emerged as a potential solution to unlock efficiencies and provide complete, real-time visibility into the company’s cash flow to make better business decisions.

Integrations with ERPs, banks, and accounting software reduce data entry errors and deliver up-to-date information to treasury and finance teams. The ability to aggregate accurate financial data in one place allows companies to become more agile and act on industry trends. Additionally, the integration streamlines treasury workflows and gives better control over cash and spending - everything a treasury manager needs.

This article discusses the benefits of APIs for finance and specifically, how they streamline treasury operations and increase visibility by integrating with ERPs, accounting tools, and banks.

API is a programme that acts as a bridge between different systems like ERPs, accounting tools, banks and financial operations platforms, enabling seamless communication and data exchange between disparate systems. As opposed to the traditionally used file transfer protocol (FTP), API does not require any formatting, sending, or downloading of data. Instead, data is transferred from one system to another immediately, thereby reducing delays and eliminating the risk of errors.

APIs are being used in finance and treasury to connect different sources of financial data and securely exchange information on payments and transactions, cash position, FX exposure, and others.

Here's what information can be shared via different systems linked to your financial operations platform or treasury management system.

ERPs and accounting tools

Bills: API connections enable the transfer of bill data, including details such as invoice numbers, due dates, and amounts. The automated payment process eliminates manual data entry and reduces the risk of errors.

Vendor Details: Through API integrations, treasurers pull vendor information from the accounting tool or ERP, including contact and payment details. This ensures accurate payment processing and enhances vendor management efficiency.

Automated Reconciliation: Two-way sync functionality also facilitates automatic reconciliation of transactions, simplifying audit preparation and month-end closing. With the elimination of manual reconciliation tasks, treasurers can save time and be confident that the numbers are accurate.

Bank

Payment Details & Status: API enables real-time sharing of payment information, allowing treasurers to track payment statuses and manage cash flows and spending in real-time. Additionally, two-way sync capabilities streamline bookkeeping of payables and receivables, marking bills as paid once they're paid. You can also track payment progress and flag any issues before they escalate.

Bank Balance Updates: By connecting to the bank, API can retrieve balance information, providing treasurers with up-to-date insights into available liquidity. A real-time view of liquidity allows proactive decision-making and prevents overdrafts.

Bank Statements and Transaction Reporting: APIs simplify reporting processes and ensure the accuracy of financial records by allowing treasurers to access bank statements and transaction reports directly from banking systems.

Consolidation of financial details in one place

API integrations make it possible to consolidate financial information from several disparate systems into one central platform. Having fewer manual data transfers between systems means less lost time and fewer errors. As a result, financial information can be accessed in real-time in one place by treasury and finance teams in order to obtain a comprehensive and accurate picture of their organization's financial condition.

Efficiency

One of the primary benefits of API integrations, and the most sought after, is the automation of treasury processes. Through two-way syncs, payment processing and reconciliation of payables and receivables can be automated, reducing manual work and streamlining banking reporting. With the reduction of laborious manual tasks, treasurers can focus on strategic activities that add value to their organisations.

Agility & better decision making

API integrations enable treasurers to make better-informed decisions based on real-time financial data. Through real-time access to foreign exchange rates, bank transactions, and payments, treasurers can respond to market opportunities and shifts with agility and optimize working capital. By continuously tracking cash positions, treasurers are able to effectively manage cash flows and make informed investment and liquidity decisions.

Accuracy of data

By integrating all systems and information sources, API integrations eliminate inconsistencies and discrepancies between systems, providing a single source of truth for financial data. Consistency improves data accuracy and reduces errors, giving treasurers confidence they can rely on the information for month-end processes and audits.

Despite the benefits API integrations bring to the financial and treasury teams, their implementation may be challenging. IT and developers may need to get involved in the process to ensure security, accuracy of data, and system scalability - something that many companies may not be willing to do. Choosing providers with out-of-the-box ERP, accounting, and open banking connections simplifies the integration process without adding additional burden to other teams

The Fyorin API is designed to provide out-of-the-box connectivity to your pre-existing bank, accounting tool or ERP of choice, allowing better unification of your global treasury and enhancing efficiency of financial processes.

Complete view of your treasury: Bring your existing bank to Fyorin and get a complete overview of your treasury and cash.

Real time payments: Retrieve bills and vendor details from your accounting tool and expedite payments instantly from Fyorin to get a real-time view of your cash outflows.

Improved cash management: Manage cash continuously and in real-time. With our centralised dashboard, you can access financial data at all times, rather than using batch reports that are restricted to predetermined times throughout the day.

Touchless reconciliation, saved time: Once bills are paid they will be automatically matched with an invoice and marked off as paid or partially paid in the accounting tool to save time on manual reconciliation.

Streamlined reporting: Receive scheduled balances and transactional reports directly to your mailbox to streamline manual reporting work.

Interested in unifying your treasury and integrating your accounting tools or bank with Fyorin? Drop us an email to sales@fyorin.com