ERP Integration: Transforming AP Operations Across Global Subsidiaries

The bigger a company grows and sets up new subsidiaries in multiple jurisdictions, the more complex and challenging it becomes for finance teams to manage accounts payable processes across the business.

Each subsidiary will need to manage its payables and treasury within its own lines of business and compliance regulations; however, CFOs will need to have broader control over the group’s processes and performance. This is where integrating a robust enterprise resource planning system with accounts payable automation software can offer a solution for multinational companies. It helps streamline financial operations across subsidiaries, continue on the growth trajectory, and gain a competitive advantage.

In this article, we explore the benefits of ERP-AP integration in the context of global accounts payable. We discuss in depth how using the API-first approach and cloud-native capabilities, as well as access to emerging payment networks, can not only streamline and unify the payables process across subsidiaries but also provide real-time data access and enhance regulatory compliance.

While it’s uncommon these days to use desktop versions of ERPs, it’s still a point worth addressing as there are businesses still relying on non-cloud versions of these core systems. Cloud ERPs offer unparalleled flexibility and scalability, especially in the context of cross-border operations and managing multiple subsidiaries, by streamlining various business processes:

Automatic Updates and Security: Cloud-based ERP systems reduce or completely eliminate the need for additional IT resources or maintenance, as they provide automatic updates that ensure financial operations take place in the most secure and up-to-date environment.

Scalability Across Global Locations: As mentioned before, cloud-based systems are much faster and easier to implement thanks to the inherently scalable cloud infrastructure. The software can scale with the business as it grows and expands to new regions, adapting to its needs.

Remote Accessibility for Teams: Regardless of where teams are based around the world, cloud-native ERP systems can provide them with secure, real-time access to financial data and allow them to collaborate with colleagues across regions.

All these benefits mean reduced infrastructure and implementation costs and increased productivity through collaboration and real-time access to data, which is particularly appealing for businesses wanting to scale. An additional benefit of cloud-based systems is easier integration with other systems, like accounts payable software.

Integrating ERP systems with an automated accounts payable tool delivers a wide range of transformative benefits that can significantly enhance business performance at the subsidiary as well as global level:

Streamlined Global AP Operations: ERP-driven AP processes lead to consistent data, improved cash visibility, and centralised control across all subsidiaries.

Cost Savings and Efficiency Gains: Automation and streamlined workflows cut time spent on manual work, reduce processing times, and lower operational costs, allowing the reallocation of both financial and human resources to more strategic activities like growth, forecasting, and planning.

Strengthened Supplier Relationships: Thanks to improved visibility of cash and opportunities, businesses can take advantage of early payment discounts, pay suppliers in their desired currency and method, and thus strengthen their relationships and reputation.

Enhanced Compliance and Risk Management: Centralising AP processes and compliance monitoring on both global and local levels helps businesses adhere to regulatory standards and minimise exposure to financial and reputational risk or penalties.

While ERP continues to be the backbone of financial operations, a smart integration with an accounts payable system allows businesses to gain greater visibility and control over cash flow and, ultimately, a competitive edge in a global marketplace. This integration digitises the entire accounts payable process, from electronic receipt to invoice automation to automatic entry and routing for approval, significantly enhancing efficiency and accuracy in financial transactions.

To fully harness the power of ERP-AP integration, businesses must plan and conduct a well-thought-through implementation process.

Establishing a partnership with a reseller of your ERP is a good idea; they will be able to guide you through the implementation process, point you to the right accounts payable and other tools you may wish to integrate, such as an AP automation software solution, as well as provide the necessary training materials. The good news is that today cloud-based ERP systems are much easier to implement and customise.

If you’re looking for a reseller partner to help you on your ERP-AP integration journey, visit our Software Resellers page.

The key steps in the implementation process you should keep in mind are:

Data Mapping and Standardisation: The data formats and structures across ERP and AP systems need to be aligned to ensure seamless data flow and accuracy in financial reporting.

Customisation and Configuration: Inevitably, both ERP and AP systems will need to be tailored to match your specific business needs and requirements.

Training and Change Management: As with every new process and system, there will be initial resistance and a learning curve. Make sure you have training programmes and materials in place to prepare your employees for the transition and help them maximise the benefits of the integrated system.

Beyond these basic aspects, there are some more advanced tips global businesses should keep in mind when setting up ERP-AP integration for multi-subsidiary operations - the API-first approach, compliance considerations, and integration with payment networks.

A major challenge many multi-subsidiary companies encounter when they try to integrate accounts payable with their ERP system is a clunky, custom-made integration that needs to be manually maintained. While it may seem like a perfect tailor-made solution for the business, the customised protocols need to be expanded every time the process is revised or the company scales further. Additionally, if anything breaks, it may take days or weeks to fix, slowing down day-to-day business operations and affecting relationships with suppliers, cash management and decision-making.

For businesses operating in the cross-border space and wanting to maintain a competitive edge, an API-first approach to ERP/AP integration is ideal, as it allows the seamless flow of data across subsidiaries. ERP software serves as the backbone of financial operations, and if integrated with payable automation software through an API, it will exchange information in real-time and without interruption, reducing silos that naturally exist between regions and departments, enabling better decision-making.

This approach also allows for better scalability. As the business grows into new regions and new subsidiaries are added, these can be easily accommodated as the API does not require lengthy and customised implementation processes. Additionally, should anything change within the AP process itself, this can be easily reflected across the organisation.

When dealing with forecasting and medium- to long-term planning, CFOs of multi-subsidiary global companies face yet another issue - lack of visibility across all accounts payable data. An integration between ERP and AP through an API ensures a real-time flow of payables and transactional data between all subsidiaries at all times.

This can be further enhanced if the company can bring banking data together through Open Banking connections rather than FTP or SFTP protocols. Real-time synchronisation of data in the same ERP accounts payable system brings several operational benefits:

Enhanced Visibility: Real-time visibility into payables, transactional, and financial data gives finance teams a unified view of cash across all subsidiaries and departments, allowing for better budget management and forecasting.

Error Reduction and Consistency: Because data is automatically exchanged between systems, the risk of errors resulting from manual data entry automatically decreases. It also establishes a consistent framework across all subsidiaries, aiding in data analysis and drawing conclusions.

Agility and Responsiveness: Real-time access to financial data allows key decision-makers to be more proactive in dealing with market and operational shifts or any regulatory changes, thereby taking better advantage of opportunities and improving overall resilience.

The real-time flow of data between ERP and AP systems, including automated invoice processing, can be a game-changer for growing companies, as it provides them with a competitive advantage to make informed decisions, minimise bottlenecks, and maintain a high level of operational efficiency.

Operating cross-border involves navigating a diverse set of compliance and regulatory rules. A well-integrated ERP system will be able to centralise and automate compliance processes across different jurisdictions to align with both local and international rules.

Compliance metrics for both individual subsidiaries and the global company can be set for accounts payable processes and seamlessly exchanged within the ERP system and vice versa, ensuring that the company meets its obligations and avoids penalties or reputational damage in each jurisdiction, also as it grows.

Secondly, ERP systems match specific tax, reporting, and financial requirements for individual regions as well as for the custom, global framework of the company, which helps to comply with both local and company standards. Combined, this approach to real-time tracking and centralisation of compliance adherence in accounts payable processes provides a robust audit trail for any regulatory checks, whether internal or external, and eases the burden of regulatory reporting. For global companies with multiple subsidiaries, this translates to greater transparency and accountability and less complexity associated with global regulatory requirements.

In line with the point about compliance, when integrating ERP and AP systems, businesses need to strike the right balance between global standardisation and regional localisation. Providing global standards on a company level can drive operational efficiency and reduce bottlenecks; however, localisation to individual regions is necessary to comply with unique tax and compliance rules.

The key is to find the right mix - apply local rules in AP processes where needed while still keeping it aligned with the organisation’s overarching policies, while at the same time using ERP’s capabilities to collect and report data in standardised formats to ensure compatibility.

The finance landscape is rapidly evolving, and ERP systems now allow businesses to integrate with payment networks and systems to expand their payment processing capabilities, streamline cash flow, and improve vendor relationships. If your ERP allows integration with payment systems to further enhance ERP-AP functionality, it is worth considering for the following reasons:

Support for Multiple Currencies: When operating globally, receiving, sending, and exchanging funds between multiple currencies is a reality. By integrating with a global payment network, you can manage payments in local currencies, thereby reducing FX exposure, currency exchange fees, and facilitating faster vendor payments.

Real-Time Payment Tracking: Integration with payment networks enables businesses to check the real-time status of vendor payments. With that, they can monitor cash flow and optimise working capital.

Some accounts payable systems offer access to payment networks, which means that by integrating your AP, you won’t need extra integration. Fyorin is a platform that seamlessly connects to your ERP through native integration and allows you to manage payables, including payments in 100+ currencies, from one place.

ERP integration with an AP automation system is now a strategic imperative for multinational businesses with several subsidiaries. Thanks to cloud-native ERPs, API-driven real-time data sync, and integration with new payment networks, businesses can streamline their global AP operations, improve financial transparency, and support sustainable growth.

The benefits of ERP-AP integration are clear: increased efficiency, cost savings, strengthened supplier relationships, and reduced compliance and regulatory risk. By adopting this transformative approach, multinational organisations can not only continue on a growth trajectory but also efficiently navigate the complexities of global finance to seize new opportunities.