Startup life is hard. Startup accounting is harder.
82% of startups fail due to cash flow issues. That’s no typo. Most shuttered startups went bust because they couldn’t get their financials to add up. Getting paid by customers is not always easy and in a startup with limited resources, managing this process can be very time-consuming.
The good news? You can have your invoicing processes automated for you but you have to make sure your invoicing software is integrated with the other platforms the startup uses. Without the right integrations invoicing is backbreaking manual labor and it’s a huge drain of time and resources that lead to money losing mistakes.
In this guide we’ll cover the different types of integrations that are essential for startup growth and how to make sure your invoicing software connects with the rest of your ecosystem.
Integrations are more important than features
Pick any group of startups. Show them a demo of some slick invoicing software with a sexy dashboard, a competitive pricing model, and a bunch of invoice templates pre-packaged in the box.
They will all get fired up over this fancy new features list before them. But they are looking at the wrong things.
The feature set doesn’t really matter because the feature list you want is: Integrations. Integrations. Integrations.
Because startups already use accounting software, payment gateways, CRMs and often times project management software. If the invoicing platform you choose can’t talk to the other systems and tools you use, you have to manually input information into each of these systems.
Errors are made, payments get delayed and cash flow becomes a problem. No more cash flow problems and startups don’t fail.
Entrepreneurs need to utilize prime software for startups because it connects the entire system together. Integrating invoicing software makes sure that data flows without any interruptions. From the invoice being automatically synced to the accounting software. To the customer paying the invoice. Payments that update on their own in real-time. Reports which automatically generate. That’s the difference between a startup drowning and scaling.
The 5 must-have invoicing software integrations
When you think about the types of software integrations that you should have it can be a long list. To help you out we’ve narrowed it down to the five integrations that will have the biggest impact.
Accounting software integration
This is a no-brainer. The number one thing to look for in any invoicing software is the integrations with the most popular accounting platforms.
The reason is that when these two systems are linked, each invoice automatically updates your books. No more double entry, reconciliation nightmares or guesswork to see if things are matching up.
The benefits here are huge:
- Real-time visibility into your financial situation
- Automatic tax calculation for both VAT and GST
- Simplified end-of-year reporting process
- Reduced fees for accountants
If you don’t have this connection you’ll likely be burning several hours every week on manual data entry which isn’t really necessary and is much better spent scaling the business.
Payment gateway integration
The faster you get paid, the better. Full stop.
Payment gateway integrations connect your invoicing software directly to the payment processor the startup uses (Stripe, Paypal, Square etc.). When a customer receives an invoice they simply click and pay with one click. The payment gets recorded straightaway.
The thing to note here is:
Slow payments create gaps in cashflow which leads startups to delay paying suppliers, missing payroll and turn down business growth opportunities.
Payments gateway integrations makes sure that customers are paying the invoice at the highest possible speed by making it as easy as possible for them to do so. The easier the payment process is, the faster the money arrives.
CRM software integration
Customer data should not be living in isolated data silos.
When your invoicing software connects directly to the CRM platform used by the startup (CRM software like HubSpot or SalesForce) it paints the startup with the most complete picture of the customer.
Sales history, communication logs, credit score and customer payment behavior all connect.
It enables the startup to:
- Personalise invoices according to customer preferences
- Automatic follow up when customers delay in paying invoices
- Improved forecasting and predictions based on pipeline data
- Better customer relationships and engagement with consistent contact
Startups which link their invoicing to CRM platforms often see not only an acceleration in payment cycles but also better customer satisfaction levels.
Bank feed integration
Manual bank reconciliation is such a time sink.
Bank feed integration draws transaction data directly into your invoicing software. The payments automatically match to their related invoices and bank balances automatically update to real-time.
The startup benefits are:
- No more logging into various bank portals
- Instant visibility into true cash position
- Automatic matching eliminates errors
- Faster month-end closing process
For startups where every dollar counts, being able to see exactly what’s in the bank at all times is very important.
Project management software integration
Service-based startups often bill on a project-by-project basis or by the hour.
Project management software integrations connect the invoicing software with project management platforms (Asana, Monday or Trello). Hours are directly connected to billing as the time is logged the data is transferred automatically to the invoice line item.
This results in much more accurate billing that’s without any manual work. No more forgetting to invoice completed tasks. No more undercharging because hours didn’t get logged.
How to find the right invoicing platform
There is an overwhelming list of invoicing platforms available today so to make this task of finding the right one for the startup a bit simpler, here’s a simple framework:
- Start with integrations first. The startup will already be using several tools. So list all of those and then check to see if the invoicing platform under consideration connects natively with the other systems.
- Automation is key. The best platforms automate recurring invoices, payment reminders and late payment follow-ups. The less manual work the team has to do, the fewer errors.
- Test the experience of using the software. If it’s not intuitive, then the team won’t be using it properly. Look for platforms which require minimal training and have an intuitive user experience.
- Scalability is important. What the startup is looking for today will be very different in 2 years. Pick a platform that grows with the business without the need for a future migration headache.
Common integration mistakes to avoid
You might be with the right invoicing software but even startups make integration mistakes. It’s human nature. Some of the biggest mistakes startups make are:
Mistake #1: Not testing integrations before committing. Free trials are there for a reason. Use them and verify that the data moves from one system to the other before signing up.
Mistake #2: Ignoring data security. Integrations are creating information pathways. Ensure that every connection has proper encryption and security best practices followed.
Mistake #3: Over-complicating the setup. Start with essential integrations and then add on more as the business grows.
Mistake #4: Overlooking mobile access. Startups are fast-moving. So ensure that the invoicing software and its integrations work well on mobile devices.
The take-home lesson
Invoicing software integrations are not just a luxury, it’s a survival strategy.
Startups which connect their invoicing platform to accounting, payments, CRM, banking and project management have a financial ecosystem which runs itself. Cashflow is smooth. Errors are a thing of the past. Growth becomes possible.
The billing and invoicing software market is exploding as businesses finally start to get this. Integration capabilities are fast becoming the feature that separates successful startups from those still struggling.
Don’t base your decision on features alone when choosing invoicing software. Base it on how well does it connect to other tools. That’s the first step to scaling the startup.
