There are many technological advancements taking place in the accounting industry today. Exacerbated by COVID, firms have accelerated their digital transformations by years. Accounting software API is one such piece of technology.
What is an Accounting Software API?
An API, or application programming interface, is a set of protocols, routines, and tools that enable software applications to communicate with each other. In the context of APIs for accounting software, these APIs allow applications to interact with (read or write) the data inside accounting systems, like QuickBooks, Xero, NetSuite, Sage, etc.
For example, an accounting software API might allow an eCommerce platform to send sale transactions to the accounting system so they can recorded (a ‘write’ or ‘push’ API function). Another example would be an accounting software API allowing a dashboard to pull data from the accounting system so the owners of the business can see sales, expense, cash flow, etc. on a display (a ‘read’ or ‘pull’ API function).
Why Do Accounting Firms Need APIs?
Many accounting firms use APIs without realizing it. Whenever an accountant connects an accounting system to an application or uses applications to read data from the system or write data to it, APIs are behind the scenes making this happen.
Although most accounting systems have publicly available APIs and documentation to work with them, this information is written for software engineers to build applications with, not for accountants directly.
Thankfully for accountants, software engineers include a user experience (or UX) inside of their applications that make it easy for accountants to interact with and benefit from them.
Without APIs (and software engineers to build using them), accountants would be stuck working in individual systems, manually reconciling and entering data between them.
Here are just a few ways that APIs provide a multitude of benefits for accounting firms:
Improved efficiency
Increased accuracy
Better client experience
Faster growth/scale
Improved Efficiency
APIs, especially accounting software APIs, enable firms to automate processes and eliminate manual tasks, such as data entry and report generation. This saves time and improves the overall efficiency of the firm’s operations. Instead of spending hours on menial, manual tasks, team members can focus on high-value, revenue-generating analysis.
Increased Accuracy
An API can enable a firm to access and integrate data directly from multiple sources. Eliminating the normal human error factor of manual data entry in these steps dramatically improves accuracy. Additionally, with an API, you can guarantee consistent output each time, making it much easier to review analysis for accuracy. The result is a higher quality analysis for your clients in less time.
Better Client Experience
APIs make it much easier for firms and clients to share information with each other in a secure and convenient way. Clients can submit financial documents, firms can share reports, and more, all with the click of a button. Clients expect digital experiences, and APIs help firms deliver on this expectation, creating better collaboration, improved communications, and better relationships between firms and their clients.
Faster Growth
By using an API, accounting practices gain a competitive advantage. Using the latest technology and capabilities in the accounting field gives firms the ability to scale. Leaner, more efficient teams can take on additional clients without hurting quality and processes can be standardized and automated for faster delivery of analysis. Technology helps firms attract not only new clients looking for convenience and speed, but it also helps firms attract top talent that would rather focus on meaningful analytical work rather than manual data entry.
Overall, using APIs can provide significant benefits to accounting and advisory firms by enabling the seamless exchange of data and information between different applications that the firm and clients use. Doing so improves the efficiency, accuracy, and overall effectiveness of a practice.
What Should You Look for in an Application That Uses an Accounting Software API?
As mentioned above, accountants generally work with applications rather than the APIs directly.
When looking for applications that leverage accounting APIs to implement, accounting and advisory practices should consider several key factors:
1. Compatibility: The application should be compatible with existing software and systems already in use. It’s common for applications to list the systems they integrate with (i.e., which APIs they interact with) and understand this will ensure the application can be easily integrated and adopted by the team without requiring complete overhauls of existing infrastructures.
2. Functionality: There are countless applications using these APIs out there, but firms should look for those that specifically address the needs of an accounting practice. Can the application access and transfer the specific financial data you need? Generate the rogjt reports? Deliver data in a usable format? Perform any analysis with the data? A good question to ask: is the application just replacing existing manual tasks with new manual tasks or will it actually reduce the workload and make your team more efficient?
3. Security: Security is particularly important for accounting and advisory firms as they deal with sensitive financial information, large amounts of data, and regulatory compliance. Only trust applications that have verified, third-party audits like the AICPA’s SOC 2 Type 2.
4. Support: As with any technology, support should be a top factor to consider. Issues will inevitably arise, so you want to make sure that the provider has a responsive support team that can jump in and offer assistance.
One last thing firms should consider when looking to adopt any new technology is, of course, the price. Different providers may offer different pricing models, such as subscription, per-transaction, or a combination of both. There could also be setup or integration fees, additional customization charges, or even support fees. Make sure you fully understand the pricing and that it aligns both with your budget and needs.
Additionally, firms should factor in the long-term support and maintenance of the application. As technology and business needs evolve, the firm may need to update or upgrade the application to maintain its functionality and compatibility. It is important to choose technology that offers long-term support to ensure it will meet the firm’s needs for years to come.
Strongbox: Built for Accounting Professionals
If you’re looking for an application that leverages accounting software APIs to help your practice reduce manual data collection, formatting, and entry, Strongbox can help. Strongbox has helped a range of practices, including transaction advisory services, audit, client accounting services, forensic accounting, business valuation, and more.
Trusted by the majority of the Top 25 Firms, Strongbox extracts data from a client’s accounting system or ERP with a single click. It then cleans, normalizes, validates, and analyzes that data to deliver a ready-to-use Excel workbook full of flat data tables, detailed financials, and more.
Safe and secure, Strongbox maintains SOC 2, Type 2 compliance and uses the latest data encryption technology.
Contact us today to see how Strongbox can help your practice scale and grow.