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Integrated Financial and CRM Systems: A Marriage of Convenience

Finance and CRM systems are not often mentioned in the same breath. The main reason being the typical buyers, both economic and users, are very different. Finance is the domain of  the Finance and Accounting department and CRM is the domain of sales, service and marketing.  Integrating the two application categories is usually not a priority, however there can be very compelling reasons to do so. The key link between them is an order management application, whether a stand-alone system or part of an integrated suite, which is often the point where sales force automation ends and core accounting begins.

As an aside, to illustrate the existential gulf between the two domains, several years ago while working for a large enterprise CRM software vendor, I was tasked with executing a demand generation campaign targeting the company’s install base. No problem I thought, just run a query against the “customer” database. Much to my surprise, our “CRM” systems contained relatively little customer information and very little about what products they had licensed. Rather, the best source of customer data and the particular applications they had licensed were found in our finance department who used another vendor’s order management and billing systems, which were part of an integrated financial management suite

The irony was only partial. The big issue was in realizing the awkwardness of the manual handoff from one system to another; orders in our company had to be manually re-keyed into the order management system after the sales opportunity was tracked to completion in our own SFA system. The inconvenience of manual data entry was only the beginning. Often details of the order were not properly transmitted (often through email) to the person responsible for order creation- a ripe opportunity for errors. This in turn had cascading effects on billing, revenue recognition, collections and sales compensation.

So why have integrated sales and finance systems? Aside from eliminating the error prone manual order entry, creating an order through automated workflow has huge benefits. For one, by using the customer master data from the CRM system, the accounts receivable people know they’re working with the most accurate information on where and to whom to send the invoice (assuming the sales team is properly maintaining the data) and reference to the customer’s corresponding purchase order. This helps prevent administrative delays in the customer’s accounts payable function. Another key advantage in having the sales and service people working through integrated systems is they can be made accountable for triggering the billing process.  Once the software ships or services are completed, they trigger an automated workflow or an alert notifying the accounts receivable function to send an invoice. This ensures the selling company invoices the customer in a timely manner and receives payment faster, thus ensuring good cash flow, keeping their days sales outstanding low and ensuring the seller gets paid on time.

Integrated software systems are not just marketing hype, they provide very tangible benefits to the companies who deploy them. An integrated order-to-cash process ensures fewer errors, prevents billing delays and prompt payment from the company’s customers. It’s a win-win for both the Finance organization and the sales teams. An added benefit is the ability to track a sales opportunity all the way through to an order and begin to show a return on the company’s marketing investment.

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