Fintech AI and automation aren’t just for SaaS providers. They’re transforming businesses and industries across the board from hospitality to nonprofits. The right finance stack leverages technology to turn small, agile accounting teams into industry leaders.
What is a finance tech stack?
A finance technology stack (fintech stack) is the set of tools that a business uses to streamline and optimize financial and accounting processes, connecting those processes efficiently to the company’s operations.
These tools and softwares typically fall into these categories:
- Payments
- Payroll and benefits
- Accounting and reporting
- Spend and expense management
- Equity and financing
- Financial planning and analysis
6 essential elements of a finance stack
As you might have guessed, the core elements of a fintech stack go hand-in-hand with the core processes of your finance and accounting team, including:
- Managing cash flow
- Tracking accounts receivable and accounts payable
- Making sure bills are accurate and that they receive the necessary approvals
- Handling payroll and so on
But managing each of these separately, even using fintech tools, isn't the same thing as leveraging AI and automation throughout your workflow, using tools that sync with each other to maximize efficiency and minimize the opportunity for human error.
1. Accounting enterprise resource planning (ERP) system
Like accounting software, an accounting ERP helps you track your financial transactions and provides up-to-date financial reporting and analysis.
However, an accounting ERP can also go beyond these functions, tying them more closely to your business operations. It might, for example, integrate with your inventory management system or with your production tracking system.
Many ERP accounting systems are entry points into broader, more powerful ERP systems that can do much more. A small business might start with an accounting ERP, then add on things like inventory management later as they grow.
2. Accounts payable (AP) system
An AP system tracks invoices, automates approval routing according to your custom approval policies, and streamlines the payment process, reducing the time spent on AP and again minimizing the chance of human error.
3. Accounts receivable (AR) system
An AR system automates the processes of customer invoicing and payment collection to improve customer experience while better managing cash inflows, reducing payment delays, and minimizing human error.
4. Spend management system
A spend management system helps a business track and control spending in a way that goes beyond the basic functionality of accounting software.
There are several approaches to automating spend management tasks, many of which are often integrated directly into either the ERP accounting system, the AP system, or both.
5. Expense management system
An expense management system records, tracks, approves, and reimburses employee expenses according to company policies.
This can also include corporate credit cards that integrate budget management tools, applying reimbursement rules and limits automatically.
6. Payroll system
The payroll system manages employee wages, bonuses, tax payments, and benefits.
How an integrated finance stack can help your company scale
An integrated finance stack lets organizations focus on growth by reducing the manual workload of running their finance and accounting processes.
A fintech stack automates manual tasks—things like entering invoice data, checking invoice numbers for possible duplication, routing invoices to the right people for approval, storing invoices and related communication, and keeping an audit trail of invoice approvals and other touchpoints.
With the time savings of AI-enabled automation, not to mention better insight into cash inflows and outflows, finance and accounting teams can spend more time on the kind of strategic initiatives that fuel expansion.
6 steps to building an integrated finance stack
Building the right integrated finance tech stack can make managing your finances easier and help you stay ahead of the competition. Follow these 6 steps to building your perfect finance tech stack.
Step 1. Determine your business needs
Start by assessing your current financial processes and determining which elements need improvement.
Step 2. Shop smart
As you start to research and demo the tools to fill your fintech stack, it’s smart to ask yourself these questions:
- Integration: Does the solution play nicely with all your existing tools? Does it replace a tool you are already using? If you want to build an integrated finance stack, the key is obvious—choose systems that sync with each other, especially with your ERP accounting system.
- UX (User Experience): Is it intuitive and easy to maneuver? Do users like using it or is it a pain?
- Pricing: Can you afford it? Is it subscription-based or a one-time expense?
- Security: How secure is the solution?
- Automation: How much time could be saved from leveraging automation? The best fintech stacks harness the power of AI and automation to handle manual or repetitive tasks.
- Scalability: Can it scale as you grow?
Step 3: Build your shortlist
Choose 3-5 solutions that best fit your needs. Consider hiring a financial advisor or consultant to help you choose the right solutions, set up your stack, and provide guidance and best practices.
Step 4. Get hands-on experience
Look for free trials or live demos so you and your team can see how each solution performs.
Step 5. Implement and train
Once you’ve selected the right solutions for your fintech stack, it’s time to implement them into your business processes and train your employees to ensure a smooth transition.
Make sure the systems you choose allow all the various levels of access your team needs. Many companies, for example, give department leads direct visibility into their own department’s profitability. Others might require more than one admin approval to change things like bank account numbers within the payment system.
Step 6. Reevaluate regularly
The perfect finance tech stack is never finished. Keep up to date on the latest financial trends and technologies by attending conferences, reading industry publications, and following thought leaders in your field.
BILL as an your integrated financial operations solution
The most widely used automated payables and receivables platform, BILL is used by more than 460,000 businesses to automate their AP, AR, spend, and expense. Over 5.8 million network members pay and get paid with BILL.
If you’d like to learn what BILL can do for your business, schedule a demo or start your risk-free trial today.