The Multi-Entity AP Headache
If you’re juggling AP for more than one legal entity, you’ve likely run into these challenges:
1. Disconnected Processes
Each entity has its own way of handling invoices, approvals, and payments. That means more manual work and inconsistent policies.
Nearly 48% of invoices are still received manually in mid-market firms—leading to slow approvals and data errors.
2. Limited Visibility
Without a consolidated system, it’s hard to know what’s outstanding, what’s approved, or what’s coming due—especially when approvals are sitting in someone’s inbox.
“Lack of visibility” is a top AP challenge cited by finance leaders.
3. Cross-Border FX Costs
Every international payment carries hidden fees. Banks typically add 2–3% FX markups that go unnoticed—but add up fast.
In 2023 alone, Canadian SMBs lost an estimated $800 million to FX fees on international payments.
4. Compliance Risks
Multiple tax jurisdictions and varying internal controls open the door to fraud and audit issues.
Nearly 40% of CFOs say they don’t fully trust their financial data because of fragmented processes.
What High-Performing AP Teams Do Differently
The good news? These problems are fixable. Modern finance teams are streamlining AP by centralizing processes, using automation, and consolidating payments.
Here’s how:
1. Map and Standardize the AP Process
The first step is creating a single workflow that applies across all entities. This includes:
- A unified intake method for invoices (e.g. e-invoicing, shared inbox)
- Consistent GL coding and tax rules
- A company-wide approval matrix (with defined thresholds)
- Real-time sync into your general ledger or ERP
Standardization cuts confusion and speeds up processing—especially for global AP teams.
2. Embrace Batch Processing and Approvals
Rather than managing every invoice or payment one by one, leading finance teams are moving to batch workflows. This means:
- Grouping similar invoices for scheduled pay runs
- Running approvals in bulk (instead of individually)
- Reducing transaction fees by consolidating vendor payments
Companies that use batch processing can cut invoice processing time by up to 70%, while improving accuracy and reducing duplicate payments.
3. Centralize FX and Treasury Operations
International payments should be strategic—not a source of surprise costs.
To get there:
- Maintain multi-currency accounts for major vendors (e.g. USD, EUR)
- Aggregate FX conversions instead of converting per entity
- Time FX purchases and hedge upcoming payables where possible
- Use AP software that integrates live FX conversion into the workflow
With centralized FX, businesses can reduce cross-border payment fees from ~1.5% to nearly 0%—boosting margins instantly.
4. Build Real-Time Visibility into Every Entity
Modern AP software allows you to monitor payables across every entity, in one place. Best practices include:
- A unified dashboard with real-time data
- KPIs like Days Payable Outstanding (DPO), exception rate, and late payments by entity
- Spend consolidation across vendors for better negotiation
- Alerts for policy breaches or high FX costs
Finance teams that invest in AP visibility can identify savings opportunities, flag issues earlier, and cut unnecessary spend by up to 11%.
The 2025 Playbook: Control, Consolidation, and Confidence
With growing regulatory pressure and currency volatility, multi-entity AP isn’t something you can leave to spreadsheets and email chains.
Finance leaders are shifting to platforms that let them:
✅ Approve multi-entity invoices in minutes
✅ Pay global vendors in local currencies—at better FX rates
✅ See real-time AP status across every entity
✅ Maintain clean audit trails and ensure compliance
The result? Lower processing costs, faster approvals, stronger supplier relationships—and more time for strategic work.
Ready to Fix Multi-Entity AP?
Legacy AP tools were built for single-entity workflows. But 2025 demands more. If you're looking to reduce costs, streamline approvals, and simplify FX across borders, it's time to rethink how your AP function is set up.
Platforms like Finofo make it easy to bring all your entities under one roof—with one login, one workflow, and full visibility. Want to give it a try?
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