Building an Accounts Receivables and Invoicing System in FileMaker Pro


Long ago, a wise old accountant named Bud, once pointed out to a much younger version of me, that most businesses have very similar accounting needs with respect to Accounts Payable, General Ledger and Payroll systems. Where they differ the most is in the Sales and Accounts Receivable (also Inventory Systems, but that is a story for another day) module.

Some examples of this might be illustrative. A shoe store has different customer tracking needs than a publication or a welding shop. A burger place might never need to record a customer’s name and address or track the production of the components of the customer’s burger. But all these businesses are treated similarly by standard off-the-shelf accounting packages.

I want to review why a business might want to consider replacing or augmenting the standard A/R package built into their Sage, AccountEdge, MoneyWorks or Quickbooks systems with a FileMaker Pro-based solution.

Customization – What do you need? Do you know what you need now?

Bud was my company’s accountant when I was a partner in the retail furniture business back in the mid 1980’s. At the time things were pretty low-tech and we were running our system off of a cash register. The register had Price Look Ups, (PLUs) so you could enter a code for each item. These PLUs where the equivalent of product serial numbers in a database and were meant to allow better analysis of products sold. It also meant that staff had to memorize these numbers, or look up each item on a printed list before entering the sale. As the number of items grew in the store, and the number of stores increased, we started looking for a Point of Sale (POS) system to help us with this task. In the early 1980’s, IBM PCs and their clones were just starting to come on the scene. Even at that early stage, there were dozens of options in the POS area. One way of conceptualizing a POS system is simply as a Sales and Accounts Receivable system. It is just that in retail, most of the money is often paid immediately, so the POS gives you the ability to generate an invoice and get paid while the customer is still standing there.

We called and requested the brochures from the major POS vendors and puzzled over the many options. We were ultimately stuck in an inertia of too much choice and not enough knowledge about the capabilities of each system. I left the company before the issue was resolved, but the remaining partner eventually implemented a simple FileMaker Pro-based system that allowed him build his own POS. He was able to prioritize the options he needed and add them as he saw fit.

Timeliness – Getting the Invoices Out Quickly

My next business, in the early 90’s, was publishing a computer publication. We ran on a monthly deadline and soon found that we were too slow in getting out our invoices. By the time the next issue deadline came round, our customers would complain, ‘but I have only had your invoice for a week!’ The industry standard for them was 30 day payment from the time they received the invoice. We had to come up with a faster way to get out our invoices. The solution turned out to be FileMaker Pro again. We built a customer tracking (Customer Relationship Management or CRM) and invoicing system in FileMaker Pro that allowed us to send our customers an invoice at the same time that we were sending the magazine off to the printer, so that in 30 days when the next booking deadline arose, they had a payment due and could insist that the customer pay up before being able to book the next advertisement. FileMaker Pro saved the day again. There was no accounting system at that point that would have allowed us to achieve that goal.

Other benefits of a FileMaker Pro-based A/R system

Access and Learning Curve

Accounting systems are for accounting and bookkeeping people, not sales people. The last thing you want is a salesperson mucking around in an accounting system, when they should be making sales. FileMaker allows you or a developer to create a user friendly interface that the salesperson can get up and running on quickly. The accounts and privileges system of FileMaker means that you can allow the salesperson access to exactly the right layouts, scripts and records to get their job done without exposing them to too much corporate information.

Cost

Accounting systems, especially big ones cost a lot per seat. FileMaker Pro is relatively low cost, especially with the new annual plans. For example, a five person office could be up and running for as little as $20/month/employee. As your company grows, you simply add more licenses. With the right hardware and a well-crafted solution, FileMaker can grow easily into a couple hundred employees accessing the same system. Adding offices in different location is straightforward using the ‘Open Remote‘ capability.

Mobile

FileMaker Go is a free client for FileMaker Pro that is relatively easy to setup. Just add a few custom layouts and your sales or customer service teams can access the company database from anywhere, staying up to date on the latest happenings in your system.

Web

Need to let your clients have access to something in your database? You can let them view their own records or stay up to date on a project with FileMaker Pro 13’s new WebDirect technology. It is not necessary for them to have a copy of FileMaker software—any modern web browser will get them in the door.

Interfacing FileMaker Pro with the Most Common Accounting Software packages

Everyone interfaces with their customers in a slightly different way. This point of contact, as represented in software, is where most of the customization of software should take place. Traditionally, accounting packages are pretty inflexible with regards to customization. That is what FileMaker Pro is very good at—building workflows and customizations that make it an exact fit for a specific business.

FileMaker should be used to build this type of bespoke interface for dealing with customers and the companies workflows. I would never recommend trying to build an accounting system in FileMaker Pro, although it certainly has been done. A better approach is to build the front end of your system in FileMaker, up to and including sending out invoices, and even recording payments. Then integrate this system with a professional Accounting systems using plugins or web APIs to link them together.

Accounting software keeps getting better at allowing integration. Even a few years ago most packages were data islands and the need to re-key data was common. Nowadays many of the packages are available with cloud options, complete with an API that developers can access to get and send data to the accounting package.

 

FileMaker-based Accounting Software Packages

There are of course completely FileMaker Pro-based accounting software packages. Being able to customize and fit an integrated accounting system to your company’s requirements can be a real advantage. Despite Bud’s declaration, some businesses do have different needs in the other major accounting modules and customization can be useful there as well.

There are a number of all-FileMaker packages available.

Some questions to ask when reviewing FileMaker-based accounting packages include:

  • How long has your product been in the market? – longevity can be good and bad. If it has been around for a while, it probably has most of the bugs worked out of it. On the other hand, FileMaker techniques keep changing as new features become available. What was a good way of doing things 5 or 10 years ago (multiple files for data tables for example) may not be the best way of doing things now. Developers are often loathe to go back and re-jigger (a technical term) working code, just because a new feature or better method exists.
  • What version is it available in? Obviously if you are going to purchase today, you should be getting a package that runs on and takes advantage of the new features of the latest version of FileMaker Pro
  • Is there an open version available for customization? If you can’t customize it, you might as well work with one of the big name packages, like Quickbooks, AccountEdge etc.
  • How are upgrades handled? One approach to upgrades that some developers use is to build it using the Separation Model (at least two files — data and user interface), but what happens when you (or your local developer) customize the UI and then the accounting software developer offers a new version?

 

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