No matter what business sector you’re in, you’ve probably at least heard the acronym API come up at some point. API stands for Application Programming Interface. An API is a kind of digital technology that allows web-based systems and applications to communicate with each other. You may also have heard the term API integrations. Unless you’re a software developer, it’s very easy to confuse APIs and API integrations.
Without getting too technical, an API is a group of rules, subroutines, definitions and tools that facilitates the communication between software components. An API is what makes it possible for a user to get what they ask for from an app or web-based system.
Through an interface, the app submits the user’s request in the form of data to the API. The API interprets the data and then provides an answer in such a way that the user can understand. An example of this is when you use Google to find out the day’s weather forecast. Google isn’t itself a meteorology site. It gets the information from a third-party through an API and then tells you the current temperature and other weather details.
Today, most businesses will have several processes and systems–each with their own APIs– that need to interact and share data to ensure they’re operating with high efficiency and automated functioning. For these separate and distinct systems to work together flawlessly, to connect in a unified manner, there must be API integration.
What is API integration?
API integration is a process that designs a way for two or more APIs to communicate with one another and share critical data–without any intervention from humans while it’s happening.
API integration has become a necessary solution in today’s world because of the rapid growth of apps and other cloud-based products. Nowadays, organizations of every size need their data to be connected and accessible between all their different software tools without having to accomplish the connections manually.
How does API integration work?
First let’s take a look at how a business operates when there is no API integration. The business has a digital ERP and an accounting software system. Recently the business added an AP and AR solution which has definitely made the finance team perform with higher rates of efficiency and accuracy–just not as high as they could be. See, they’re still having to switch between the different system’s portals in order to begin critical tasks such as payments. It’s like flying from one city to another with two stops in between and having to retrieve your luggage at baggage claim and then recheck them at each stop. The bags will eventually get to your final destination, but it’s not very convenient.
Now let’s see how the finance team works when there are API integrations in place. They can start and complete key functions directly inside the portals. The API integrations sync the various data sets and permit the exchange of data between systems. In accounts payable, for example, the integration would import data from accounts, including rates and suppliers, to AP software and then export invoices complete with an original file attached.
Back to the travel analogy. You can get on the plane and land somewhere sunny without ever having to deal with your bags once they’re checked at the beginning of the trip. That’s the simplicity and convenience of API integrations.
What are the benefits of API integration?
As you can see from the above scenarios it makes a lot of sense to have API integrations because of their ability to streamline business processes and internal workflows. For finance professionals, the benefits are many:
1) Enhanced visibility
API integrations provide end-to-end visibility of business systems and processes. This comprehensive and transparent view improves financial reporting and communication, impacting both treasurers who are initiating a payment and the payees as well. With this level of streamlining, more effective tracking and monitoring translates into robust and thorough reporting.This means that the finance team is able to manage cash based on real-time, accurate data.
2) Automated data transfer
The automatic exchange of information and data from one application to another is an additional reason why API integrations are so beneficial, especially when you think about the instances when there’s a need to transfer large amounts of complex data. Without API integrations, this would have to be done manually, a tedious and time-consuming task. With integrations, embedding content from one application to the next is not a problem. API integrations give users more flexibility and the opportunity to deliver better service.
3) Reduction in errors
Not only does the automatic sharing provide a time savings, it also reduces the number of errors and omissions that can occur when humans are responsible for inputting data. The result is a higher level of professionalism which customers appreciate and lower costs as mistakes won’t have to be tracked down and corrected.
4) Scalability
As businesses grow, typically so does their use of and reliance on applications and web-based systems. With API integrations, a business’s expansion is not hindered since it won’t need to spend time and effort on connecting the various systems in their existing ecosystem.
5) Eases the burden on IT resources
Now more than ever, IT teams are charged with digital transformation initiatives and there’s no sign that these demands are slowing down any time soon. However, a business’s digitization process can slow down without API integrations. These integrations mean the need for manual processes and custom scripting that can tie up IT is significantly lessened. When IT’s focus isn’t diverted to trying to get systems to interact without hitches, they can continue with the tasks they were first charged with.
What About Scrypt?
Powered by Artificial Intelligence and Machine Learning, Scrypt’s cognitive automation allows companies to transform their AP and AR processes for higher volumes, accuracy and efficiency. Scrypt is customizable and scalable, delivering next level payables automation for any business.
Our platform is designed with API integrations that allow for seamless communication and data sharing between your existing systems of record, eSign solutions and it also supports custom business workflows.
Want to see Scrypt in action? Set up a demo today.