By: Karen Fagan, Head of Treasury Consultancy Service, AccessPay

For scaling businesses, finance transformation is a fundamental piece of the growth puzzle. Yet projects to implement or upgrade enterprise resource planning (ERP) systems don’t always live up to their promise to deliver end-to-end payment automation. Often, this is due to a late realisation that bank connectivity hasn’t been included in the project scope, which risks derailing ERP implementations in their last mile.

For chief financial officers (CFOs) embarking on an ERP migration, it’s vital to understand where bank connectivity fits within the project plan during the scoping phase.

The finance transformation imperative

A sprawling patchwork of systems, siloed teams, fragmented processes, and limited cash visibility… These are just some of the everyday realities for finance teams in growing organisations.

As businesses scale, enter new markets, and add new banking relationships, this complexity increases exponentially, driving the need for finance transformation to reduce inefficiencies, increase automation, and improve oversight of the company’s financial position.

In many organisations, CFOs build their transformation plans around an ERP implementation. ERPs are undeniably powerful accelerators of automation for complex finance functions, helping to automate invoicing workflows, ledger updates, payment file generations, and reporting processes. However, they have their limitations.

Crucially, ERPs don’t typically integrate with banks, which means any automation benefits stop at the point where funds leave the system and statement data enters it. Consequently, payment instructions are still exported into files for manual submission to banks, bank statement data is downloaded from bank portals for manual submission to ERPs, and the goal of end-to-end automation falls flat.

This hidden dependency is often revealed late in the migration process and can risk derailing flagship transformation projects. However, if bank connectivity is considered from the outset, this problem can easily be avoided.

Scoping for end-to-end automation

For any CFO contemplating an ERP migration for their organisation, it is essential to include bank connectivity in the project scope. End-to-end automation of accounts payable (AP), accounts receivable (AR), and reconciliation relies on the secure, reliable flow of payments and statement data, which in turn requires deep bank integration. Descoping bank connectivity from finance transformation projects simply shifts the inefficiencies and risks of manual processes to other parts of the workflow, in this case, payment orchestration, exception handling, and statement retrieval.

Starting at the last mile

Most finance processes revolve around banking relationships, so when setting a transformation project in motion, banking connectivity is often the best starting point. It also provides a strong foundation for later phases, reshaping what transformation can achieve. Finance functions can adopt a “plug and play” approach to additional technology solutions. As such, rather than attempting a big-bang transformation and changing everything at once, organisations can take an incremental approach, tackling each problem at a time and expanding division by division.

The first step is to establish secure host-to-host (H2H) connections to facilitate the two-way flow of payment instructions and statement data between existing ERPs, other back-office systems, and the organisation’s banks, effectively centralising bank and statement data. This delivers several benefits, including end-to-end automation of payments and reconciliation, reduced need for manual approvals, and improved controls. In doing so, it frees up finance teams for strategic, value-add activities rather than manual workflows.

However, the benefits extend far beyond increasing automation and improving efficiency. With payment and statement data centralised, finance leaders have full visibility over the company’s cash position, a common challenge for multi-banked organisations. They are also better placed to adopt cash management and cash intelligence solutions to optimise cash and liquidity. Last, but not least, it also provides greater flexibility to start working with new banking partners, as they can be easily added to the existing setup rather than introducing new complexities into the system.

Scaling the finance function

For scaling businesses, finance transformation is a key step in facilitating future growth. When building this transformation strategy and developing plans for ERP implementations, it’s essential that CFOs also consider bank connectivity.

By embedding H2H connectivity from the outset, organisations can reap the full benefit of ERP investments and deliver true end-to-end payment automation.